UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 20-F
☐
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 20202021
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☐
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report: Not applicable
For the transition period from ___________________________ to ___________________________
Commission file number 001-38802
 CASTOR MARITIME INC.
 
 (Exact name of Registrant as specified in its charter) 
   
 (Translation of Registrant'sRegistrant’s name into English) 
   
 Republic of the Marshall Islands
 
 (Jurisdiction of incorporation or organization) 

 223 Christodoulou Chatzipavlou Street
 
 Hawaii Royal Gardens
 
 3036 Limassol, Cyprus 
 (Address of principal executive offices) 
 
Petros Panagiotidis, Chairman, Chief Executive Officer and Chief Financial Officer
223 Christodoulou Chatzipavlou Street, Hawaii Royal Gardens, 3036 Limassol, CyprusCY
Phone number: + 357 25 357 767
Fax Number: +357 25 357 796
 
 
(Name, Telephone, E-mail and/or Facsimile number and
Address of Company Contact Person)
 


Securities registered or to be registered pursuant to Section 12(b) of the Act:



Securities registered or to be registered pursuant to Section 12(b) of the Act:
 
 
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
 
 
Common Shares, $0.001 par value
CTRM

 
CTRM
Nasdaq Capital Market

 
 
Series C Participating Preferred Shares, $0.001 par value
CTRM
Nasdaq Capital Market
Share Purchase Rights under Stockholders Rights Agreement
 

Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
Indicate the number of outstanding shares of each of the issuer'sissuer’s classes of share capital as of the close of the period covered by the annual report:
As of December 31, 2020,2021, there were outstanding 131,212,37694,610,088 common shares of the Registrant, $0.001 par value per share.
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
☒☐ Yes
☐☒No

If this report is an annual report or transition report, indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
☐ Yes
☒ No

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
☒ Yes
☐ No

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during this preceding 12 months (or for such shorter period that the registrant was required to submit such files).
☒ Yes
☐ No

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of "large“large accelerated filer"filer”, "accelerated“accelerated filer,"” and "emerging“emerging growth company"company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐
Accelerated filer ☐
Non-accelerated filer ☒
☐
Emerging Growth Company ☒

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☒

† The term "new“new or revised financial accounting standard"standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management'smanagement’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
Indicate by check mark which basis of accounting the Registrant has used to prepare the financial statements included in this filing:
☒ U.S. GAAP
☐ International Financial Reporting Standards as issued by the International Accounting Standards Board
☒U.S. GAAP
☐

☐
International Financial Reporting Standards as issued by the International Accounting Standards Board
☐Other
If "Other"“Other” has been checked in response to the previous question, indicate by check mark which financial statement item the Registrant has elected to follow.
☐  Item 17
☐
☐Item 17
☐Item 18
If this is an annual report, indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
☐ Yes
☒ No

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
☐ Yes
☐ No



TABLE OF CONTENTS
PAGE

PAGE
1

ITEM 1.
1

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS1

ITEM 2.
1

ITEM 3.
1

ITEM 4.
3830
ITEM 4A.
5547
ITEM 5.
5547
ITEM 6.
7166
ITEM 7.
7367
ITEM 8.
7569
ITEM 9.
7670
ITEM 10.
7670
ITEM 11.
9581
ITEM 12.

9582

9683
ITEM 13.
9683
ITEM 14.
9683
ITEM 15.
9683
ITEM 16. RESERVED
9884
ITEM 16A.
9884
ITEM 16B.
9884
ITEM 16C.
9785
ITEM 16D.
9985
ITEM 16E.
9985
ITEM 16F.
9985
ITEM 16G.
9985
ITEM 16H.

10086
PART III

ITEM 16I.
10086
ITEM 17. FINANCIAL STATEMENTS100
86
ITEM 18. 17.
10086
ITEM 18.
86
ITEM 19. EXHIBITS
10087




i
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Matters discussed in this annual report may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995, or the PSLRA, provides safe harbor protections forWe intend such forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.
Castor Maritime Inc. desires to take advantage ofbe covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the PSLRASecurities Act of 1933, as amended (the “Securities Act”) and isSection 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include all matters that are not historical facts or matters of fact at the date of this document.
We are including this cautionary statement in connection with this safe harbor legislation. This annual report and any other written or oral statements made by us or on our behalf may include forward-looking statements, which reflect our current views with respect to future events and financial performance. When used in this annual report,These forward-looking statements may generally, but not always, be identified by the words "anticipate," "believe," "targets," "likely," "will," "would," "could," "seeks," "continue," "contemplate," "possible," "might," "expect," "intend," "estimate," "forecast," "project," "plan," "potential," "may," "should," anduse of works such as “anticipate,” “believe,” “targets,” “likely,” “will,” “would,” “could,” “should,” “seeks,” “continue,” “contemplate,” “possible,” “might,” “expect,” “intend,” “estimate,” “forecast,” “project,” “plan,” “objective,” “potential,” “may,” “anticipates” or similar expressions or phrases may identify forward-looking statements.phrases.
The forward-looking statements in this annual report are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management'smanagement’s examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies thatwhich are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these forward-looking statements, including these expectations, beliefs or projections.
In addition to these assumptions, and matters discussed elsewhere herein and in the documents incorporated by reference herein, important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the following:generally:
our business strategy, expected capital spending and other plans and objectives for future operations;
dry bulk and tanker market conditions and trends, including fluctuationsvolatility in charter rates, factors affecting supply and demand, andfluctuating vessel values, opportunities for the profitable operations of dry bulk and tanker carriers;carriers and the strength of world economies;
the rapid growth of our fleet, our ability to realize the expected benefits from our past or future vessel acquisitions, and the effects of our fleet’s growth on our future financial condition, oroperating results, of operations and our future revenues and expenses;
our continued borrowing availability under our debt agreements and compliance with the covenants contained therein;
our ability to procure or have access to financing, ourexpenses, future liquidity, and the adequacy of cash flows forfrom our operations;
our relationships with our current and future service providers and customers, including the ongoing performance of their obligations, compliance with applicable laws, and any impacts on our reputation due to our association with them;
our ability to borrow under existing or future debt agreements or to refinance our debt on favorable terms and our ability to comply with the covenants contained therein, in particular due to economic, financial or operational reasons;
our continued ability to enter into time or voyage charters with existing and new customers, and to re-charter our vessels upon the expiry of the existing charters;
changes in our operating and capitalized expenses, including bunker prices, dry-docking, insurance costs, costs associated with regulatory compliance, and insurance costs;costs associated with climate change;
ii
our ability to fund future capital expenditures and investments in the acquisition and refurbishment of our vessels (including the amount and nature thereof and the timing of completion thereof, the delivery and commencement of operations dates, expected downtime and lost revenue);
planned, pending
instances of off-hire, including due to limitations imposed by COVID-19 and/or recent acquisitions, business strategy and expected capital spending or operating expenses, including dry-docking, surveys,due to vessel upgrades and insurance costs;repairs;
future sales of our expectations regardingsecurities in the availability of vessel acquisitionspublic market and our ability to complete acquisitionmaintain compliance with applicable listing standards;
volatility in our share price, including due to high volume transactions as planned;in our shares by retail investors;
our ability to realize the expected benefits from our vessel acquisitions;
ii


vessel breakdowns and instances of off-hire;
potential conflicts of interest involving members of our Board of Directors, or the Board,senior management and senior management;certain of our service providers that are related parties;
potential liability from pending or future litigation and potential costs due to environmental damage and vessel collisions;
potential exposure or loss from investment in derivative instruments (if any);
changes in supply and demand in the dry bulk and tanker shipping industry, including the market for our vessels and the number of newbuildings under construction;
the length and severity of epidemics and pandemics, including the ongoing global outbreak of the novel coronavirus ("COVID-19") and its impact on the demand for seaborne transportation in the dry bulk and tanker sector;
the strength of world economies;
stability of Europe and the Euro;
fluctuations in interest rates and foreign exchange rates;
changes in seaborne and other transportation;
changes in governmental rules and regulations or actions taken by regulatory authorities;
general domestic and international political conditions or events, including "trade wars";“trade wars”, global public health threats and major outbreaks of disease;
potential
changes in seaborne and other transportation, including due to fluctuating demand for dry bulk and tanker vessels and/or disruption of shipping routes due to accidents, political events, international hostilities and instability, piracy or acts of terrorism;
changes in governmental rules and regulations or actions taken by terrorists;regulatory authorities, including changes to environmental regulations applicable to the shipping industry;
our business strategy and other plans and objectives for future operations;
future sales of our securities in the public market;
the impact of the discontinuance of LIBOR after 2021 on interest rates of our debt that reference LIBOR;
the impact of adverse weather and natural disasters;
the impact of public health threats and outbreaks of other highly communicable diseases; and
any other factorsfactor detailed in this annual report and from time to time in our periodic reports.
Any forward-looking statements contained herein are made only as of the date of this annual report, and except to the extent required by applicable law, we undertake no obligation to update any forward-looking statement or statements, to reflectwhether as a result of new information, future events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events.otherwise. New factors emerge from time to time, and it is not possible for us to predict all or any of these factors. Further, we cannot assess the impact of each such factor on our business or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any forward-looking statement. See the section entitled "Item“Item 3. Key Information—D. Risk Factors" of this annual report on Form 20-F for the year ended December 31, 2020Factors” for a more complete discussion of these risks and uncertainties and for other risks and uncertainties. These factors and the other risk factors described in this annual report are not necessarily all of the important factors that could cause actual results or developments to differ materially from those expressed in any of our forward-looking statements. Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements.

iii
PART I
ITEM 1.IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable.
ITEM 2.OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable.
ITEM 3.
 KEY INFORMATION
Unless the context otherwise requires, as used in this annual report, the terms "Company"“Company”, "we"“we”, "us"“us”, and "our"“our” refer to Castor Maritime Inc. and all of its subsidiaries, and "Castor“Castor Maritime Inc."” refers only to Castor Maritime Inc. and not to its subsidiaries. We use the term deadweight ton, or dwt, in describing the size of vessels. Dwt, expressed in metric tons, each of which is equivalent to 1,000 kilograms, refers to the maximum weight of cargo and supplies that a vessel can carry.
A.Selected Financial Data
The selected consolidated financial and operational datadescriptions of agreements contained herein are summaries that set forth below shouldcertain material provisions. Such descriptions do not purport to be readcomplete and are subject to, and are qualified in conjunction with our audited consolidated financial statements and related notes included in "Item 18. Financial Statements" herein, and together with "Item 5. Operating and Financial review and Prospects". The selected statementtheir entirety by reference to, the applicable provisions of operations data for the years ended December 31, 2020 and 2019, the three-month transition period ended December 31, 2018, the year ended September 30, 2018 and the period ended September 30, 2017 and the selected balance sheet data aseach agreement, each of December 31, 2020 and 2019 have been derived from our audited consolidated financial statements included elsewhere inwhich is an exhibit to this annual report. The selected balance sheet data as of December 31, 2018 have been derived from our audited consolidated financial statements included in our annual report on Form 20-F or included as an exhibit to certain of our other of our reports and other information filed with the Securities and Exchange Commission (the “SEC”). We encourage you to refer to each agreement for the year ended December 31, 2019. The selected balance sheet data as of September 30, 2018additional information.

On May 28, 2021, we effected a one-for-ten reverse stock split on our common shares. All share and 2017per share amounts have been derived from our audited consolidated financial statements included in our annual report on Form 20-F forretroactively adjusted to reflect the year ended September 30, 2018.
In U.S. dollars, except for share data 
Period from December 13, 2016 to
September 30, 2017
  Year ended September 30, 2018  Three-months ended December 31, 2018  Year ended December 31, 2019  Year ended December 31, 2020 
SELECTED STATEMENT OF OPERATIONS DATA               
Vessel revenues, net  2,018,061   3,960,822   1,111,075   5,967,772   12,487,692 
Voyage expenses – including related parties  (80,853)  (37,373)  (19,556)  (261,179)  (584,705)
Vessel operating expenses  (1,194,995)  (1,727,770)  (432,544)  (2,802,991)  (7,447,439)
General and administrative expenses                    
- Company administration expenses (including related party)  (58,467)  (109,233)  (22,954)  (378,777)  (1,130,953)
- Public registration costs  (35,973)  (350,167)  (161,116)  (132,091)  - 
Depreciation & amortization  (182,346)  (637,611)  (177,378)  (897,171)  (1,904,963)
Provision for doubtful debt  -   -   -   -   (37,103)
Management fees, related parties  (55,500)  (111,480)  (29,440)  (212,300)  (930,500)
Operating Income $409,927  $987,188  $268,087  $1,283,263  $452,029 
                     
Interest and finance costs – including related party  (532)  (3,393)  (519)  (222,163)  (2,189,577)
Interest income  -   4,243   7,985   31,589   34,976 
Gain on derivative financial instruments  475,530   -   -   -   - 
Foreign exchange (losses)/gains  (7,021)  (8,539)  89   (4,540)  (29,321)
Other, net  740   1,439   800   -   - 
Total other income/(expenses), net  468,717   (6,250)  8,355   (195,114)  (2,183,922)
 US Source Income Taxes  -   -   -   -   (21,640)
Net income/(loss) $878,644  $980,938  $276,442  $1,088,149  $(1,753,533)
                     
EARNINGS/(LOSS) PER COMMON SHARE, basic & diluted $0.35  $(0.28) $(0.30) $0.31  $(0.03)
                     
Weighted average number of common shares outstanding, basic and diluted  2,400,000   2,400,000   2,400,000   2,662,383   67,735,195 
                     
CASH FLOW DATA:                    
Net Cash Provided by/ (Used in) Operating Activities $770,749  $902,706  $148,106  $2,311,962  $(2,343,809)
Net Cash Used in Investing Activities  (7,549,281)  -   -   (17,227,436)  (35,472,173)
Net Cash Provided by Financing Activities  7,615,000   -   -   18,087,133   42,183,946 
                     
SELECTED BALANCE SHEET DATA (as of period/year): September 30, 2017  September 30, 2018  December 31, 2018  December 31, 2019  December 31, 2020 
Total current assets $1,350,983  $2,110,000  $2,847,417  $6,220,897  $13,564,154 
Vessel(s), net  7,366,935   7,070,404   6,995,350   23,700,029   58,045,628 
Total assets  8,717,918   9,623,798   10,183,837   30,420,926   74,371,355 
Total current liabilities  224,274   149,216   432,813   2,982,750   10,903,907 
Total long-term debt, including current portion and related party debt, net of unamortized deferred financing fees  -   -   -   15,757,060   18,185,866 
Common stock  2,400   2,400   2,400   3,318   131,212 
Total shareholders' equity  8,493,644   9,474,582   9,751,024   13,204,011   52,383,619 
Shares issued and outstanding  2,400,000   2,400,000   2,400,000   3,318,112   131,212,376 
                     

1


FLEET PERFORMANCE DATA: 
Period from December 13, 2016 to
September 30, 2017
  
Year
ended
September 30, 2018
  
Three-months ended
December 31, 2018
  
Year
ended
December 31, 2019
  
Year ended
December 31, 2020
 
Number of vessels at the end of the year  1   1   1   3   6 
Available days (1)
  216   336   92   545   1,219 
Ownership days (2)
  222   365   92   556   1,405 
Fleet utilization (3)
  97%  92%  100%  98%  87%
                     
OTHER OPERATIONAL METRICS:                    
Daily time charter equivalent (or TCE) (4)
 $8,969  $11,677  $11,864  $10,471  $9,765 
EBITDA (4)
 $1,061,522  $1,617,699  $446,354  $2,175,894  $2,327,671 
___________________________
(1) Available days are the Ownership days after subtracting off-hire days associated with major scheduled repairs, vessel upgrades and dry-dockings or special or intermediate surveys and major unscheduled repair and positioning days (which do not include ballast voyage days for which compensation has been received by the Company).reverse stock split. The shipping industry uses Available days to measure the aggregate number of days in a period during which vessels are available to generate revenues. Our calculation of Available days may not be comparable to that reported by other companies.
(2) Ownership days are the total number of calendar days in a period during which we owned our fleet, or our Fleet.
(3) We calculate fleet utilization by dividing the number of our Available days during a period by the number of our Ownership days during that period.

(4) Non-GAAP Financial Information

Time Charter Equivalent ("TCE") Rate. TCE rate, is a measurepar value of the average daily revenue performance of a vessel and is calculated by dividing total revenues (time charter and/or voyage revenues, net of charterers' commissions), less voyage expenses, by the number of Available Days during that period. Under a time charter, the charterer pays substantially all the vessel voyage related expenses. However, we may incur voyage related expenses when positioning or repositioning vessels before or after the period of a time charter, during periods of commercial waiting time or while off-hire during dry-docking or due to other unforeseen circumstances. The TCE rate is not a measure of financial performance under U.S. GAAP (non-GAAP measure), and should not be considered as an alternative to Time charter revenues, net, the most directly comparable GAAP measure, or any other measure of financial performance presented in accordance with U.S. GAAP. TCE rate is a standard shipping industry performance measure used primarily to compare period-to-period changes in a company's performance and assists our management in making decisions regarding the deployment and use of our vessels and in evaluating their financial performance. Our calculation of TCE rates may not be comparable to that reported by other companies. The following table reflects the calculation of our TCE rates for the periods presented (amounts in U.S. dollars, except for Available Days):
(In U.S. dollars, except for Available days) For the period ended September 30, 2017  
Year ended
September 30, 2018
  
Three Months Ended
December 31, 2018
  
Year ended
December 31, 2019
  
Year ended
December 31, 2020
 
Vessel revenues, net $2,018,061  $3,960,822  $1,111,075  $5,967,772  $12,487,692 
Voyage expenses  (80,853)  (37,373)  (19,556)  (261,179)  (584,705)
Time charter equivalent revenues  1,937,208   3,923,449   1,091,519   5,706, 593   11,902,987 
Available days  216   336   92   545   1,219 
Time charter equivalent (TCE) rate $8,969  $11,677  $11,864  $10,471  $9,765 

common shares remained unchanged at $0.001 per share.
2


EBITDA. We define EBITDA as earnings before interest and finance costs (if any), net of interest income/(loss), taxes (when incurred), depreciation and amortization of deferred dry-docking costs. EBITDA is used as a supplemental financial measure by management and external users of financial statements, such as investors, to assess our operating performance. We believe that EBITDA assists our management and investors by providing useful information that increases the comparability of our performance operating from period to period and against the operating performance of other companies in our industry that provide EBITDA information. This increased comparability is achieved by excluding the potentially disparate effects between periods or companies of interest, depreciation and amortization and taxes, which items are affected by various and possibly changing financing methods, capital structure and historical cost basis and which items may significantly affect net income between periods. We believe that including EBITDA as a measure of operating performance benefits investors in (a) selecting between investing in us and other investment alternatives and (b) monitoring our ongoing financial and operational strength. EBITDA is not a measure of financial performance under U.S. GAAP, does not represent and should not be considered as an alternative to net income, operating income, cash flow from operating activities or any other measure of financial performance presented in accordance with U.S. GAAP. EBITDA as presented below may not be comparable to similarly titled measures of other companies. The following table reconciles EBITDA to net income, the most directly comparable U.S. GAAP financial measure, for the periods presented:
Reconciliation of Net Income/(Loss) to EBITDA    
 Period ended September 30, Year ended September 30, Three Months Ended December 31, Year ended December 31,  Year ended December 31, 2020 
(In U.S. Dollars)2017 2018 2018 2019  2020 
Net Income/(Loss) $878,644  $980,938  $276,442  $1,088,149  $(1,753,533)
Depreciation and amortization  182,346   637,611   177,378   897,171   1,904,963 
Interest and finance costs, net  532   (850)  (7,466)  190,574   2,154,601 
US Source Income Taxes  -   -   -   -   21,640 
EBITDA $1,061,522  $1,617,699  $446,354  $2,175,894  $2,327,671 


A.[Reserved]
Not applicable.


B.Capitalization and Indebtedness
Not applicable.

C.Reasons for the Offer and Use of Proceeds
Not applicable.

D.Risk Factors
   Some of the following risks relate principally to the industry in which we operate. Other risks relate principally to the ownership of our common stock.shares. The occurrence of any of the events described in this section could significantly and negatively affect our business, financial condition, operating results, cash available for dividends, as and if declared, or the trading price of our common stock.shares.
Summary of Risk Factors
Charter hire rates for dry bulk and tanker vessels are volatile and have declined significantly since their historic highs and may remain at low levels orvolatile. A decrease in the future, whichcharter rates may adversely affect our earnings, revenuesbusiness, financial condition and operating results.

An oversupply of dry bulk and/or tanker vessel capacity may prolong or further depress low charter rates when they occur, which may limit our profitability.ability to operate our vessels profitably.

Global economic and financial conditions may continue to negatively impact the dry bulk and tanker sectors of the shipping industry.industry, including the extension of credit.

The Company is exposed to fluctuating pricesRisks involved in operating ocean-going vessels could affect our business and reputation.

1
The operation of tankers has unique operational risks associated with the transportation of oil.

Seasonal fluctuationsA decline in the tanker and dry bulk industry demandmarket values of our vessels could have a material adverse effect on our business, financial condition and results of operations andlimit the amount of available cash with whichfunds that we can pay dividends.borrow, cause us to breach certain financial covenants in our credit facilities, and result in impairment charges or losses on sale.
3


A shift in consumer demand from oil towards other energy sources or changes to trade patterns for refined oil products may have a material adverse effect on our business.
Risks involved with operating ocean-going vessels could affect our business and reputation, which could have a material adverse effect on our results of operations and financial condition.
The U.K.'s withdrawal from the European Union may have a negative effect on global economic conditions, financial markets and our business.
Changes in the economic and political environment in China and policies adopted by the government to regulate its economy may have a material adverse effect on our business, financial condition and results of operations.
Acts of piracy on ocean-going vessels could adversely affect our business.
The smuggling of drugs or other contraband onto our vessels may lead to governmental claims against us.
Political instability, terrorist attacks, international hostilities and global public health threats, can affect the seaborne transportation industry, whichincluding major outbreaks of diseases, could adversely affect our business.

A cyber-attack could materially disrupt our business.
Major outbreaks of diseases (such as COVID-19) and governmental responses thereto could adversely affect our business.
If our vessels call on ports located in countries or territories that are the subject of sanctions or embargoes imposed by the U.S. government or other governmental authorities, it could lead to monetary fines or penalties and adversely affect our reputation and the market for our common shares.
Compliance with safety and other vessel requirements imposed by classification societies may be costly and could reduce our net cash flows and negatively impact our results of operations.

Regulations relating to ballast water discharge may adversely affect our revenues and profitability.
The IMO 2020 regulations may cause us to incur substantial costs and to procure low-sulfur fuel oil directly on the wholesale market for storage at sea and onward consumption on our vessels.
We are subject to laws, regulations and regulations,standards (including environmental standards such as IMO 2020, standards regulating ballast water discharge, etc.), which cancould adversely affect our business, results of operations, cash flows, and financial condition, and our ability to pay dividends (as and if declared).
Climatecondition. In particular, climate change and greenhouse gas restrictions may adversely impact our operations and markets.

We are subject to international safety standards and the failure to comply with these regulations may subject us to increased liability, may adversely affect our insurance coverage and may result in a denial of access to, or detention in, certain ports.
Developments in safety and environmental requirements relating to the recycling of vessels may result in escalated and unexpected costs.
Maritime claimants could arrest our vessels, which could interrupt our cash flow and business.
Governments could requisition our vessels during a period of war or emergency resulting in a loss of earnings.
Increased inspection procedures and tighter import and export controls could increase costs and disrupt our business.

Our business has inherent operational risks,We have grown our fleet exponentially and we may have difficulty managing our growth properly which may not be adequately covered by insurance.
Failure to comply with the U.S. Foreign Corrupt Practices Act could result in fines, criminal penalties, charter terminations and an adverse effect onadversely affect our business.
We are a recently formed company with a limited history of operations.
Our Fleet currently consists of nine dry bulk carriers and two tanker vessels and we are awaiting delivery of three dry bulk carriers. Any limitation in the availability or operation of these vessels could have a material adverse effect on our business, results of operations and financial condition.profitability.

We may not be able to re-charterexecute our growth strategy and we may not realize the benefits we expect from past acquisitions or obtain new and favorable chartersfuture acquisitions or other strategic transactions.

We operate secondhand vessels with an age above the industry average which may lead to increased technical problems for our vessels, which could adverselyhigher operating expenses, affect our revenuesability to profitably charter our vessels and profitability.to comply with environmental standards and future maritime regulations and result in a more rapid depreciation in our vessels’ market and book values.

We are subject to certain risks with respect todependent upon Castor Ships and Pavimar, which are related parties, and other third-party sub-managers (particularly for our counterparties on contracts,tanker segments), for the management of our fleet and business, and failure of such counterparties to meet their obligations could cause us to suffer losses or negatively impact our results of operations and cash flows.

The failure of our charterers to meet their obligations under our charter agreement, on which we depend for our revenues, could cause us to suffer losses or otherwise adversely affect our business.
Our credit facilities contain, and we expect that any new or amended credit facility we may enter into will contain, restrictive financial covenants that limit,we may not be able to comply with due to economic, financial or operational reasons and may limit the future, our business and financing activities.

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We are exposed to volatility in the London Interbank Offered Rate or LIBOR, and we may enter into derivative contracts, which can result in higher than market interest rates and charges against our income. If volatility in LIBOR occurs, it could affect our profitability, earnings and cash flow.
Our vessels operate under a mix of period time charters and trip time charters and any decrease in trip charter rates or indexes in the futureBoard may adversely affect our earnings.
We may not be able to obtain financing on acceptable terms, which may negatively impact our planned growth.
The Company has relied on financial support from Mr. Panagiotidis through related party loans, which may not be available to the Company in the future.
We are a holding company, and we depend on the ability of our subsidiaries to distribute funds to us in order to satisfy our financial and other obligations.
We cannot assure you that our Board willnever declare dividends.

We are dependent upon Castor Ships and Pavimar, which are related parties, for the management of our Fleet and business.
We may have difficulty managing our planned growth properly.
As we expand our business, we may be unable to improve our operating and financial systems and to recruit suitable employees and crew for our vessels.
Exposure to currency exchange rate fluctuations will result in fluctuations in our cash flows and operating results.
We operate secondhand vessels, and, as a result, we may incur increased operating costs which could adversely affect our earnings. Furthermore, as our vessels age, the risks associated with our vessels could adversely affect our ability to obtain profitable charters.
Technological innovation and quality and efficiency requirements from our customers could reduce our charter hire income and the value of our vessels.
Increasing scrutiny and changing expectations from investors, lenders and other market participants with respect to our Environmental, Social and Governance ("ESG") policies may impose additional costs on us or expose us to additional risks.
We may be subject to litigation that, if not resolved in our favor and not sufficiently insured against, could have a material adverse effect on us.
A change in tax laws, treaties or regulations, or their interpretation, of any country in which we operate could result in a higher tax rate on our worldwide earnings, which could result in a significant negative impact on our earnings and cash flows from operations.
We are dependent on our management and their ability to hire and retain key personnel, in particular our Chairman, Chief Executive Officer and Chief Financial Officer, Petros Panagiotidis.
Our share price has recently been highly volatile and may continue to be volatile in the future, and as a result, investors in our common shares could incur substantial losses.

Nasdaq may delist our common shares from its exchange which could limit your ability to make transactions in our securities and subject us to additional trading restrictions.

Recent share issuances and future issuances, or the issuancepotential of additional shares in the futuresuch issuances, may impact the price of our common shares and our ability to regain compliance with Nasdaq's minimum bid price requirement.
We have a continuing ATM program in effect, under which we may sell up to $10.0 million of our common shares.
We issued 918,112, 127,894,264 and 575,945,560 common shares during 2019, 2020 and 2021, respectively, through various transactions. Shareholders may experience significant dilution as a result of our offerings.
Future issuances or sales, or the potential for future issuances or sales, of our common shares may cause the trading price of our securities to decline and could impair our ability to raise capital through subsequent equity offerings.
Shareholders may experience significant dilution as a result of any such issuances.

We are incorporated in the Marshall Islands, which does not have a well-developed body of corporate and case law.

We are incorporated in the Marshall Islands, and all of our officers and directors are non-U.S. residents. It may be difficult to serve legal process or enforce judgments against us, our directors or our management.
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Anti-takeover provisions in our organizational documents and in our stockholder rights plan could have the effect of discouraging, delaying or preventing a merger or acquisition, or could make it difficult for our shareholders to replace or remove our current Board, which could adversely affect the market price of our common shares.
Our Chairman, Chief Executive Officer and Chief Financial Officer, who may be deemed to beneficially own, directly or indirectly, 100% of our Series B Preferred Shares, has control over us.

We are an "emerging growth company", and we cannot be certain if the reduced requirements applicable to emerging growth companies make our securities less attractive to investors.
U.S. tax authorities could treat us as a "passive foreign investment company", which could have adverse U.S. federal income tax consequences to U.S. shareholders.
We may have to pay tax on United States source income, which would reduce our earnings, cash from operations and cash available for distribution to our shareholders.
Our Series A Preferred Shares rank senior to our common shares with respect to dividends, distributions and payments upon liquidation, which could have an adverse effect on the value of our common shares.
We may not have sufficient cash from our operations to enable us to pay dividends on our Series A Preferred Shares following the payment of expenses and the establishment of any reserves.
The Series A Preferred Shares represent perpetual equity interests.
Our Series A Preferred Shares are subordinate to our indebtedness, and your interests could be diluted by the issuance of additional preferred shares, including additional Series A Preferred Shares, and by other transactions.
We may redeem the Series A Preferred Shares, and holders of Series A Preferred Shares may not be able to reinvest the redemption price they receive in a similar security.
Holders of Series A Preferred Shares have extremely limited voting rights.
Our ability to pay dividends on and to redeem our Series A Preferred Shares is limited by the requirements of Marshall Islands law.
RiskRisks Related to Our Industry
Charter hire rates for dry bulk and tanker vessels are volatile and have declined significantly since their historic highs and may remain at low levels orvolatile. A decrease in the future, whichcharter rates may adversely affect our earnings, revenuesbusiness, financial condition and our profitability.operating results.
The dry bulk shipping industry is cyclical with attendant volatility in charter hire rates and profitability. The degree of charter hire rate volatility among different types of dry bulk vessels has varied widely, and charter hire rates for dry bulk vessels have declined significantly from historically high levels. For example, in the past, time charter and spot market rates for dry bulk vessels have declined below operating costs of vessels. The Baltic Dry Index, or BDI, an index published by the Baltic Exchange Limited of shipping rates for 20 key dry bulk routes, fell 97% from a peak of 11,793 in May 2008 to a low of 290 in February 2016. While the BDI has since increased to 1960 on March 15, 2021, there can be no assurance that the dry bulk charter market will not decline further in the future.
The tanker industry is also both cyclical and volatile in terms of charter rates and profitability. Periodic adjustments to the supply of and demand for oil tankers cause the industry to be cyclical in nature. We expect continued volatility in market rates for our tanker vessels in the foreseeable future with a consequent effect on our liquidity as soon as the charters attached to those vessels expire. A worsening of current global economic conditions resulting from the COVID-19 pandemic and other factors may cause tanker charter rates to further decline and thereby adversely affect our ability to charter or re-charter our vessels or to sell them on the expiration or termination of their charters. Fluctuations in charter rates may impact both our dry bulk and vessel values result from changes in the supplytanker operations and demand for tanker capacity and changes in the supply and demand for oil and oil products. Fluctuations in charter rates result from changes in the supply and demand for vessel capacity and changes in the supply and demand for the major commodities carried by water internationally. Becauseinternationally, including oil and oil products.
The dry bulk shipping industry is cyclical with attendant volatility in charter hire rates and profitability, and in the factors affectingpast, time charter and spot market rates for dry bulk vessels have declined below operating costs of vessels. The degree of charter hire rate volatility among different types of dry bulk vessels has varied widely. The tanker industry is also both cyclical and volatile in terms of charter rates and profitability. Fluctuations in charter rates result from changes in the supply and demand for vessels are outsidetanker capacity and changes in the supply and demand for oil and oil products.
Deterioration of charter rates resulting from various factors relating to the cyclicality and volatility of our controlbusiness may adversely affect our ability to profitably charter or re-charter our vessels or to sell our vessels on a profitable basis. This could negatively impact our operating results, liquidity and are unpredictable,financial condition.
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As a result of the nature, timing, directionongoing COVID-19 pandemic, it is likely that our dry bulk and degree of changes intanker charter rates are also unpredictable.will continue to be exposed to volatility in the near to medium term. Such exposure could have a material adverse effect on our business, financial condition and operating results.
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Factors that influence demandDemand for vesseldry bulk capacity include:
is affected by supply of and demand for, energy resources,and changes in the production or manufacturing, of commodities, semi-finished and finished consumer and industrial productsproducts. Demand for tanker capacity is affected by supply of and demand for crude oil (for our Aframax/LR2 tanker segment) and supply and demand for oil and petroleum products;products (for our Handysize tanker segment). A variety of factors may impact supply of and demand for crude oil, oil and petroleum products, including regional availability of refining capacity and inventories and competition from alternative sources of energy.
changes in the exploration or production of energy resources, commodities, semi-finished
Factors that influence demand for both dry bulk and finished consumer and industrial products;tanker vessel capacity include:
the location of regional and global exploration, production and manufacturing facilities;
the location of consuming regions for energy resources, commodities, semi-finished and finished consumer and industrial products;
the globalization of production and manufacturing;
global and regional economic and political conditions and developments, including armed conflicts and terrorist activities, embargoes and strikes;
developments in international trade;
changes in seaborne and other transportation and distribution patterns, leading to repositioningtypically influenced by the relative advantage of the various sources of production, locations of consumption, pricing differentials and distances cargo is transported by sea;seasonality;
pandemics, such as the COVID-19 outbreak;
environmental and other regulatory developmentsdevelopments;
with respect to tanker vessel demand, regional availability of refining capacity and inventories, competition from alternative sources of energy and the distance over which oil and oil products are to be moved by sea;
currency exchange rates; and
the weather.
Demand for our vessels is dependent upon economic growth in
For a discussion of factors affecting the world's economies, seasonal and regional changes in demand, changes in the capacitysupply of the globalboth dry bulk and tanker fleet and the sources and supplyvessel capacity, see “—An oversupply of dry bulk and/or tanker vessel capacity may prolong or further depress low charter rates when they occur, which may limit our ability to operate our vessels profitably.”  These factors are outside of our control and wet cargo transported by sea. Toare unpredictable, and accordingly we may not be able to correctly assess the extent that the newbuilding deliveries exceed the scrapping ratesnature, timing and degree of older vessels, the capacitychanges in charter rates. Any of the global fleet of dry bulk and tanker vessels may exceed the economic growth and the resulting demand for vessel capacity. As such, adverse economic, political, social or other developmentsthese factors could have a material adverse effect on our business, financial condition and operating results. In particular, a significant decrease in charter rates would cause asset values to decline. See “—A decline in the market values of our vessels could limit the amount of funds that we can borrow, cause us to breach certain financial covenants in our credit facilities and/or result in impairment charges or losses on sale. Elevated vessel values could also adversely affect our business, cash flows, financial condition and operating results.”
An oversupply of dry bulk and/or tanker vessel capacity may prolong or further depress low charter rates when they occur, which may limit our ability to operate our vessels profitably.
Factors that influence the supply of both dry bulk and tanker vessel capacity include:
the number of newbuilding orders and deliveries;
the number of shipyards and ability of shipyards to deliver vessels;
port and canal congestion;
scrapping of older vessels;
the speed of vessels being operated;

•
vessel casualties; and
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vessel casualties;
with respect to tanker vessel supply, demand for alternative sources of energy and supply and demand for energy resources and oil and petroleum products; and
the number of vessels that are out of service or laid up.
environmental concerns and regulations;
product imbalances (affecting the level
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developments in international trade, including refinery additions and closures; and
port or canal congestion.
In addition to the prevailing and anticipated charter rates, factors that affect the rate of newbuilding, scrapping and laying-up include newbuilding prices, secondhand vessel values in relation to scrap prices, drydock and special survey expenditures, costs of bunkers and other operating costs, costs associated with classification society surveys, normal maintenance costs, insurance coverage costs, the efficiency and age profile of the existing fleet in the market, and government and industry regulations of maritime transportation practices, particularly environmental protection laws and regulations. These factors influencing the
The supply of dry bulk vessels has increased as a result of the delivery of numerous newbuilding orders over the last few years.  As of December 31, 2021, newbuilding orders had been placed for an aggregate of about 7% of the existing global dry bulk fleet, with deliveries expected predominantly during the next three years.
The limited activity in the tanker newbuilding market during 2021 has retained the new contracting to active fleet ratio at relatively low levels. The total orderbook of tanker vessels as of the same date stood at 7.3% of the current fleet, with deliveries expected mainly during the next two years.
Vessel supply will continue to be affected by the delivery of new vessels and demand for shippingpotential orders of more vessels than vessels removed from the global fleet, either through scrapping or accidental losses. An oversupply of vessel capacity are outside of our control, and we may not be able to correctly assess the nature, timing and degree of changes in industry conditions.
Furthermore, a significant decreasecould exacerbate decreases in charter rates would cause asset values to decline, and weor prolong the period during which low charter rates prevail which may have to record an impairment charge in our consolidated financial statements which could adversely affect our financial results. Becausea material adverse effect on the market valueprofitability of our vessels may fluctuate significantly, we may also incur losses when we sell vessels, which may adversely affectsegments, our earnings. If we sell vessels at a time when vessel prices have fallenbusiness, cash flows, financial condition, and before we have recorded an impairment adjustment to our financial statements, the sale may be at less than the vessel's carrying amount in our financial statements, resulting in a loss and a reduction in earnings.operating results.

Global economic and financial conditions may continue to negatively impact the dry bulk and tanker sectors of the shipping industry.industry, including the extension of credit.
In the current global economy, operating businesses are faced with tightening credit, weak demand for goods and services, and weak international liquidity conditions. There has similarly been a general decline in the willingness by banks and other financial institutions to extend credit, particularly in the shipping industry, due to the historically volatile asset values of vessels.
As the shipping industry is highly dependent on economic growth and the availability of credit to finance and expand operations, it has beenmay be negatively affected by this decline. In particular, lower demand for dry bulk cargoes and crude oil and petroleum products as a result of the COVID-19 pandemic and resulting reductiondecline in economic activity as well as diminished trade credit available for the deliveryor a deterioration of such cargoes have led to decreased demand for dry bulkeconomic growth and tanker vessels, creating downward pressure on charter rates and vessel values. Any further weakening in global economic conditionsfinancial conditions. This may have a number of adverse consequences for dry bulk and tanker and other shipping sectors in which we operate, including, among other things:
low charter rates, particularly for vessels employed on short-term time charters, or in the spot market;voyage market or pools;
decreases in the market value of vessels and limited second-hand market for the sale of vessels;
limited financing for vessels;
widespread loan covenant defaults; and
declaration of bankruptcy by certain vessel operators, vessel managers, vessel owners, shipyards and charterers.
The occurrence of one or more of these events could have a material adverse effect on our business, results of operations, cash flows, compliance with debt covenants, financial condition, and financial condition.operating results.
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The Company is exposed to fluctuating demand and supply for maritime transportation services, as well as fluctuating prices of oilcommodities (such as iron ore, coal, soybeans and decreased demand for oilaggregates) and petroleum products.
Sustained periods of low oil prices typically result in reduced exploration and extraction because oil companies' capital expenditure budgets are subject to cash flow from such activities and are therefore sensitive to changes in energy prices. These changes in commodity prices can have a material effect on demand for our services, and periods of low demand can cause excess vessel supply and intensify the competition in the industry, which often results in vessels, particularly older and less technologically-advanced vessels, being idle for long periods of time. We cannot predict the future level of demand for our services or future conditions of the oil industry. Any decrease in exploration, development or production expenditures by oil companies could reduce our revenues and materially harm our business, results of operations and cash available for distribution.
The COVID-19 pandemic has in the past negatively impacted demand for oil and petroleum products. A worsening of current global economic conditions resulting from the COVID-19 pandemic and other factors may cause a decrease in demand for oil and petroleum products, whichand may havebe affected by a material effect ondecrease in the demand for our services.such commodities and/or products and the volatility in their prices.
The operation of tankers has unique operational risks associated with the transportation of oil.
The operation of
Our growth significantly depends on continued growth in worldwide and regional demand for dry bulk commodities (such as iron ore, coal, soybeans etc.) and oil and petroleum products tankers is inherently risky. An oil spill may cause significant environmental damage. Environmental laws often impose strict liability for remediationand the shipping of spills and releases of oil and hazardous substances,those cargoes, which could subject us to liability without regard to whether we were negligent be negatively affected by several factors, including declines in prices for such commodities and/or at fault. An oil spill could result in significant liability, including fines, penaltiesproducts, or general political, regulatory and criminal liabilityeconomic conditions.

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In past years, China and remediation costs for natural resource damages under other federal, state and local laws, as well as third-party damages. As a result, the unique operational risks associated with transportation of oil could result in significantly more expensive insurance coverage and the associated costs of an oil spill could exceed the insurance coverage available to us. Further, the involvement of our vessels in an oil spill or other environmental disaster may harm our reputation as a safe and reliable dry bulk and tanker operator, which couldIndia have a material adverse effect on our results of operations and financial condition.
Additionally, compared to other types of vessels, tankers are exposed to a higher risk of damage and loss by fire, whether ignited by a terrorist attack, collision, or other cause, due to the high flammability and high volumehad two of the oil transportedworld’s fastest growing economies in tankers.
Seasonal fluctuationsterms of gross domestic product and have been the main driving forces behind increases in the tankershipping trade and dry bulk industry demand could have a material adverse effect on our business, financial condition and results of operations and the amount of available cash with which we can pay dividends.
The tanker sector has historically exhibited seasonal variations in demand and, as a result, in charter rates. This seasonality may result in quarter-to-quarter volatility in our operating results. The tanker sector is typically stronger in the fall and winter months in anticipation of increased consumption of oil and petroleum products in the northern hemisphere during the winter months. As a result, our revenues from our tankers may be weaker during the fiscal quarters ending June 30 and September 30, and, conversely, revenues may be stronger in fiscal quarters ending December 31 and March 31.
The market for dry bulk transportation services is typically stronger in the fall months in anticipation of increased consumption of coal in the northern hemisphere during the winter months and the grain export season from North America. Similarly, the market for marine dry bulk transportation services is typically stronger in the spring months in anticipation of the South American grain export season due to increased distance traveled by vessels to their end destination known as ton mile effect, as well as increased coal imports in parts of Asia due to additional electricity demand for cooling during the summer months. Demand for marine dry bulk transportation services is typically weaker at the beginning of the calendar year and during the summer months. In addition, unpredictable weather patterns during these periods tend to disrupt vessel scheduling and supplies of certain commodities.
This seasonality in the tanker and dry bulk industry could have a material adverse effect on our business, financial condition and results of operations.
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A shift in consumer demand from oil towards other energy sources or changes to trade patterns for refined oil products may have a material adverse effect on our business.
A shift in the consumer demand from oil and oil products towards other energy resources such as wind energy, solar energy, electricity or water energy would potentially affect the demand for our product tankers. This could have a material adverse effect on our future performance, resultsmarine transportation. While China in particular has enjoyed rates of operations, cash flowseconomic growth significantly above the world average, slowing economic growth rates may reduce the country’s contribution to world trade growth. If economic growth declines in China, India and financial position.
Seaborne trading and distribution patterns are primarily influenced by the relative advantage of the various sources of production, locations of consumption, pricing differentials and seasonality. Changes to the trade patterns of refined oil products may have a significant negative or positive impact on the ton-mile and therefore the demand for our product tankers. This could have a material adverse effect on our future performance, results of operations, cash flows and financial position.
Risks involved with operating ocean-going vessels could affect our business and reputation, which could have a material adverse effect on our results of operations and financial condition.
The operation of an ocean-going vessel carries inherent risks. These risks include the possibility of:
a marine disaster;
terrorism;
environmental accidents;
cargo and property losses and damage; and
business interruptions caused by mechanical failure, human error, war, terrorism, piracy, political action in variousother countries labor strikes, or adverse weather conditions.
Any of these circumstances or events could increase our costs or lower our revenues. The involvement of our vessels in an oil spill or other environmental disaster may harm our reputation as a safe and reliable dry bulk and tanker operator, which could have a material adverse effect on our results of operations and financial condition.
The U.K.'s withdrawal from the European Union may have a negative effect on global economic conditions, financial markets and our business.
On June 23, 2016, in a referendum vote commonly referred to as "Brexit," a majority of voters in the U.K. voted to exit the European Union. Since then, the U.K. and the EU have negotiated the terms of a withdrawal agreement, which was approvedAsia Pacific region, we may face decreases in October 2019 and ratified in January 2020. The U.K. formally exited the European Union on January 31, 2020, although a transition period remained in place until December 2020 during which the U.K. was subject to the rules and regulations of the EU while continuing to negotiate the parties' relationship going forward, including trade deals. On December 24, 2020, the U.K. government and the EU agreed to a trade deal ("Trade and Cooperation Agreement"), which went into effect on January 1, 2021, replacing the transitional agreements. The Trade and Cooperation Agreement sets out arrangements in certain areas such as trade in goods and in services, digitalshipping trade and intellectual property. Negotiations between the U.K. and the EU are expected to continue in relation to other areas which are not covered by the Trade and Cooperation Agreement. The long-term effects of Brexit will depend on the effects of the implementation and application of the Trade and Cooperation Agreement and any other relevant agreements between the U.K. and the EU. It is unclear what long-term economic, financial, trade and legal implications the withdrawal of the U.K. from the European Union would have and how such withdrawal would affect our business. In addition, Brexit may lead other European Union member countries to consider referendums regarding their European Union membership. Any of these events, along with any political, economic and regulatory changes that may occur, could cause political and economic uncertainty and harm our business and financial results.
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Brexit contributes to considerable uncertainty concerning the current and future economic environment. Brexit could adversely affect European or worldwide political, regulatory, economic or market conditions and could contribute to instability in global political institutions, regulatory agencies and financial markets.
Changes in the economic and political environment in China and policies adopted by the government to regulate its economy may have a material adverse effect on our business, financial condition and results of operations.
The Chinese economy differs from the economies of western countries in such respects as structure, government involvement, level of development, growth rate, capital reinvestment, allocation of resources, bank regulation, currency and monetary policy, rate of inflation and balance of payments position. Prior to 1978, the Chinese economy was a "planned economy". Since 1978, increasing emphasis has been placed on the utilization of market forces in the development of the Chinese economy. Annual and five-year State Plans are adopted by the Chinese government in connection with the development of the economy. Although state-owned enterprises still account for a substantial portion of the Chinese industrial output, in general, the Chinese government is reducing the level of direct control that it exercises over the economy through State Plans and other measures. There is an increasing level of freedom and autonomy in areas such as allocation of resources, production, pricing and management and a gradual shift in emphasis to a "market economy" and enterprise reform. Limited price reforms were undertaken with the result that prices for certain commodities are principally determined by market forces. In addition, economic reforms may include reforms to the banking and credit sector and may produce a shift away from the export-driven growth model that has characterized the Chinese economy over the past few decades. Many of the reforms are unprecedented or experimental and may be subject to revision, change or abolition based upon the outcome of such experiments. The level of imports to and exports from China could be adversely affected by the failure to continue market reforms or changes to existing pro-export economic policies.demand. The level of imports to and exports from China may also be adversely affected by changes in political, economic and social conditions (including a slowing of economic growth) or other relevant policies of the Chinese government, such as changes in laws, regulations or export and import restrictions, internal political instability, changes in currency policies, changes in trade policies and territorial or trade disputes. A decreaseFurthermore, a slowdown in the economies of the United States or the European Union, or certain other Asian countries may also have adverse impacts on economic growth in the Asia Pacific region. Therefore, a negative change in the economic conditions (including any negative changes resulting from any pandemic) of any of these countries or elsewhere may reduce demand for dry bulk and/or tanker vessels and their associated charter rates, which could have a material adverse effect on our business, financial condition and operating results, as well as our prospects.

Further, on the tanker side, sustained periods of low oil prices typically result in reduced exploration and extraction because oil companies’ capital expenditure budgets are subject to cash flow from such activities and are therefore sensitive to changes in energy prices, a fact which could limit oil supply and lead to increases in oil and petroleum product prices. Consumer demand for oil and oil products, and as a result oil and oil product prices, could also be affected by a shift towards other (renewable) energy resources such as wind energy, solar energy, electricity or water energy. Changes in oil supply balance and oil prices can have a material effect on demand for oil and oil product shipping services. In particular, changes to the trade patterns of crude and refined oil products may have a significant negative or positive impact on the ton-mile, and therefore the demand for our tankers. Periods of low demand can cause excess vessel supply and intensify the competition in the industry, which often results in vessels being idle for long periods of time, which could reduce our revenues and materially harm the profitability of our Aframax/LR2 and Handysize tanker segments, our business, results of operations and available cash. The COVID-19 pandemic has also negatively impacted demand for oil and petroleum products during 2021. The global economy and demand for oil and oil products currently remains and is expected to continue to remain subject to substantial uncertainty due to the COVID-19 pandemic and related containment efforts throughout the world and disruptions in oil supply due to the recent conflict in Ukraine and related against Russia and Belarus, which may have a material effect on demand for tanker shipping services, and, consequently, on our business, financial condition, cash flows and operating results. See also “—Political instability, terrorist attacks, international hostilities and global public health threats can affect the seaborne transportation industry, which could adversely affect our business.”
Increases in bunker prices could affect our operating results and cash flows.

Fuel is a significant, if not the largest, expense in our shipping operations when vessels are under voyage charter and is an important factor in negotiating charter rates. Bunker prices have increased significantly during 2021. Prices for Very Low Sulphur Fuel Oil (VLSFO) in Singapore started at around $415 per metric ton in January 2021 and reached $640 per metric ton by the end of November 2021, or an increase of more than 50%, before falling to $600 per metric ton due to fears of global economic slowdown due to the new “Omicron” variant of COVID-19. Our bunker costs have further risen as a result of the eruption of armed conflict in Ukraine. As a result, our bunker costs for our vessels operating in the spot voyage charter market have increased substantially in 2021 and may increase further in the future, a fact which has and could further affect our operating results and cash flows.
Risks involved in operating ocean-going vessels could affect our business and reputation.

The operation of an ocean-going vessel carries inherent risks. These risks include the possibility of:
a marine disaster;
terrorism;
environmental accidents;
cargo and property losses and damage; and
business interruptions caused by mechanical failure, human error, war, terrorism, piracy, political action in various countries, labor strikes, or adverse weather conditions.
Environmental laws often impose strict liability for remediation of spills and releases of oil and hazardous substances, which could subject us to liability without regard to whether we were negligent or at fault. A spill, either of oil  or oil products cargo carried by our tankers or of bunkers on our vessels, or an accidental release of other hazardous substances from our vessels, could result in significant liability, including fines, penalties and criminal liability and remediation costs for natural resource damages, as well as third-party damages.
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Any of these circumstances or events could increase our costs or lower our revenues. The involvement of our vessels in an oil spill or other environmental incident may harm our reputation as a safe and reliable dry bulk and tanker operator, which could have a material adverse effect on our business, cash flows, financial condition, and operating results.
In addition to the foregoing risks, the operation of tankers and transportation of oil presents unique operational risks. See “¾The operation of tankers has unique operational risks associated with the transportation of oil.”
The operation of tankers has unique operational risks associated with the transportation of oil.

The operation of oil and petroleum products tankers is inherently risky and presents unique operational risks. For example, an oil spill may cause significant environmental damage.  Additionally, compared to other types of vessels, tankers are exposed to a higher risk of damage and loss by fire, whether ignited by a terrorist attack, collision, or other cause, due to the high flammability and high volume of the oil transported in tankers. As a result, the unique operational risks associated with transportation of oil could result in significantly more expensive insurance coverage and the associated costs of an oil spill could exceed the insurance coverage available to us. Any of the foregoing factors may adversely affect our tanker segments, our cash flows and segment and overall operating results.

The operation of tankers is subject to strict regulations and vetting requirements, that our technical manager and sub-managers need to comply with. Should either we or our managers and third-party sub-managers not continue to successfully clear the oil majors’ risk assessment processes, our tanker vessels’ employment, as well as our relationship with charterers, could be adversely affected.

Shipping, and especially crude oil, refined product and chemical tankers have been, and will remain, heavily regulated. For an overview of government regulations that may impact our tanker operations, see “Item 4.B. Business Overview¾Environmental and Other Regulations in the Shipping Industry.” The so called “oil majors” companies, together with a number of commodities traders, represent a significant percentage of the production, trading and shipping logistics (terminals) of crude oil and refined products worldwide. Concerns for the environment have led the oil majors to develop and implement a strict ongoing due diligence process when selecting their commercial partners. This vetting process has evolved into a sophisticated and comprehensive risk assessment of both the vessel operator and the vessel, including physical ship inspections, completion of vessel inspection questionnaires performed by accredited inspectors and the production of comprehensive risk assessment reports. In the case of term charter relationships, additional factors are considered when awarding such contracts, including:

office assessments and audits of the vessel operator;
the operator’s environmental, health and safety record;
compliance with the standards of the International Maritime Organization (the “IMO”), a United Nations agency that issues international trade standards for shipping;
compliance with heightened industry standards that have been set by several oil companies;
shipping industry relationships, reputation for customer service, technical and operating expertise;
compliance with oil majors codes of conduct, policies and guidelines, including transparency, anti-bribery and ethical conduct requirements and relationships with third parties;
shipping experience and quality of ship operations, including cost-effectiveness;
quality, experience and technical capability of crews;
the ability to finance vessels at competitive rates and overall financial stability;
relationships with shipyards and the ability to obtain suitable berths;

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construction management experience, including the ability to procure on-time delivery of new vessels according to customer specifications;
willingness to accept operational risks pursuant to the charter, such as allowing termination of the charter for force majeure events; and
competitiveness of the bid in terms of overall price.

Should either we or our managers and third-party sub-managers not continue to successfully clear the oil majors’ risk assessment processes on an ongoing basis, our tanker vessels’ present and future employment, as well as our relationship with our existing charterers and our ability to obtain new charterers, whether medium or long-term, could be adversely affected. Such a situation may lead to the oil majors’ terminating existing charters and refusing to use our tanker vessels which would adversely affect the growth of our tanker segments, our cash flows and segment and overall operating results.
We are new entrants to the tanker shipping business and may face difficulties in establishing our Aframax/LR2 and Handysize tanker segments.

We established our tanker operations and two reportable segments relating to tanker shipping in 2021 by acquiring seven Aframax/LR2 and two Handysize tanker vessels. As new entrants to the tanker shipping business, we may struggle to establish market share and broaden our customer base for our tanker operations due to our lesser known reputation for tanker shipping, while incurring high operating costs associated with the operation and upkeep of our tankers. Further, we likely possess less operational expertise relative to more experienced competitors and may be more heavily reliant on the knowledge and services of third-party providers for our operations. Accordingly, as of the date of this annual report, Pavimar, has subcontracted the technical management for our tanker vessels to third-party management companies. Failure to partner with third-party providerswith the appropriate expertise to effectively deliver our services could tarnish our reputation as a tanker operator and impact the growth of our tanker operations, our financial condition and operating profits.
A decline in the market values of our vessels could limit the amount of funds that we can borrow, cause us to breach certain financial covenants in our credit facilities and/or result in impairment charges or losses on sale.
The fair market values of dry bulk and tanker vessels have generally experienced high volatility. The fair market values of our vessels depend on a number of factors, including:

prevailing level of importscharter rates;
general economic and market conditions affecting the shipping industry;
the types, sizes and ages of the vessels, including as compared to other vessels in the market;
supply of and exports from Chinademand for vessels;
the availability and cost of other modes of transportation;
distressed asset sales, including newbuilding contract sales below acquisition costs due to lack of financing;
cost of newbuildings;
governmental or other regulations, including those that may limit the useful life of vessels; and
the need to upgrade vessels as a result of charterer requirements, technological advances in vessel design or equipment or otherwise.

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If the fair market values of our vessels decline, we might not be in compliance with various covenants in our credit facilities, some of which require the maintenance of a certain percentage of the fair market values of the vessels securing the facility to the principal outstanding amount of the respective facility or a maximum ratio of total net debt to the market value adjusted total assets. See “—Our credit facilities contain, and we expect that any new or amended credit facility we enter into will contain, restrictive covenants that we may not be able to comply with due to economic, financial or operational reasons and may limit our business and financing activities.”
In addition, if the fair market values of our vessels decline, our access to additional funds may be affected and/or we may need to record impairment charges in our consolidated financial statements or incur loss on sale of vessels which can adversely affect our financial results. Because the market values of our vessels may fluctuate significantly, we may also incur losses when we sell vessels, which may adversely affect our earnings. Conversely, if vessel values are elevated at a time when we wish to acquire additional vessels, the cost of such acquisitions may increase and this could adversely affect our business, cash flows, financial condition and operating results and financial condition.results.
Acts of piracy or other attacks on ocean-going vessels could adversely affect our business.
Acts of piracy have historically affected ocean-going vessels trading in regions of the world such as the South China Sea, the Indian Ocean and, in particular, the Gulf of Aden off the coast of Somalia and in particular, the Gulf of Guinea region off Nigeria, which experienced increased incidents of piracy in recent years. Sea piracy incidents continue to occur increasingly in the Sulu Sea and the Gulf of Guinea, with dry bulk and tanker vessels particularly vulnerable to such attacks. In the past, politicalPolitical conflicts have also resulted in attacks on vessels, mining of waterways and other efforts to disrupt international shipping. TheAn attack on one of our vessels or merely the perception that our vessels are a potential piracy or terrorist target could have a material adverse impacteffect on our business, financial condition and results of operations.operating results.
Further, if these piracy attacks occur in regions in which our vessels are deployed that insurers characterize as "war risk"“war risk” zones or by the Joint War Committee as "war“war and strikes"strikes” listed areas, premiums payable for such coverage could increase significantly and such insurance coverage may be more difficult to obtain, if available at all. In addition, crew costs, including costs that may be incurred to the extent we employ on-board security guards, could increase in such circumstances. We may not be adequately insured to cover losses from these incidents, which could have a material adverse effect on us. In addition, detention hijacking as a result of an act of piracy against our vessels, or an increase in cost, or unavailability of insurance for our vessels, could have a material adverse impact on our business, results of operations, cash flows and financial condition, and thisincidents. This may result in loss of revenues, increased costs and decreased cash flows to our customers, which could impair their ability to make payments to us under our charters.charters, which could have a material adverse impact on our business, cash flows, financial condition and operating results.
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The smuggling of drugs or other contraband onto our vessels may lead to governmental claims against us.
We expect that our vessels will call in ports in areas where smugglers attempt to hide drugs and other contraband on vessels, with or without the knowledge of crew members. To the extent our vessels are found with contraband, whether inside or attached to the hull of our vessel and whether with or without the knowledge of any of our crew, we may face governmental or other regulatory claims which could have an adverse effect on our business, results of operations, cash flows and financial condition.
Political instability, terrorist attacks, international hostilities and global public health threats can affect the seaborne transportation industry, which could adversely affect our business.
We conduct most of our operations outside of the United States, or the U.S., and our business, results of operations, cash flows, financial condition and ability to pay dividends, if any, in the future may be adversely affected by changing economic, political and government conditions in the countries and regions where our vessels are employed or registered. Moreover, we operate in a sector of the economy that is likely to be adversely impacted by the effects of political conflicts.
Currently, the world economy faces a number of challenges, including public health concerns stemming from the ongoing COVID-19 pandemic, trade tensions between the United States and China and between the United States and the European Union, continuing turmoil and hostilities in the Middle East, the Korean Peninsula, North Africa, Venezuela, Iran and other geographic areas and countries, continuing economic weakness in the European Union, geopolitical events such as the withdrawal of the U.K. from the European Union ("Brexit"(“Brexit”), the continuing threat of terrorist attacks around the world, and slowing growth in China.
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In particular, the recent eruption of armed conflict between Russia and Ukraine and a severe worsening of Russia’s relations with Western economies has created significant uncertainty in global markets, including increased volatility in fuel and oil products prices and shifts in trading patterns that may continue into the future. These changes are due in part to the imposition of sanctions against Russia and Belarus. See “¾Our charterers calling on ports located in countries or territories that are the subject of sanctions or embargoes imposed by the U.S. government (including OFAC) or other authorities or failure to comply with the U.S. Foreign Corrupt Practices Act (the “FCPA”) or similar laws could lead to monetary fines or penalties and adversely affect our reputation. Such failures and other events could adversely affect the market for our common shares.” The shipping industry may be negatively affected by rising costs and changing patterns of supply and demand, and our tanker business in particular may be adversely affected by volatility in oil and oil products prices.
Additionally, in Europe, large sovereign debts and fiscal deficits, low growth prospects and high unemployment rates in a number of countries have contributed to the rise of Eurosceptic parties, which would like their countries to leave the Euro. Brexit has increased the risk of additional trade protectionism and has created supply chain disruptions. Similar events in other jurisdictions, could impact global markets, including foreign exchange and securities markets. Any resulting changes in currency exchange rates, tariffs, treaties and other regulatory matters could in turn adversely impact our business,results of operations, financial condition and cash flows.
The threat of future terrorist attacks around the world also continues to cause uncertainty in the world'sworld’s financial markets and international commerce and may affect our business, operating results and financial condition. Continuing conflicts and recent developments in the Middle East, including continuing unrest in Syria and Iran and the overthrow of Afghanistan’s democratic government by the Taliban, may lead to additional acts of terrorism and armed conflict around the world, whichworld. This may contribute to further economic instability in the global financial markets and international commerce. Additionally, any escalations between the United States and Iran could result in retaliation from Iran that could potentially affect the shipping industry, through increased attacks on vessels in the Strait of Hormuz (which already experienced an increased number of attacks on and seizures of vessels in 2019 and 2020). These uncertainties could also adversely affect our ability to obtain additional financing or insurance on terms acceptable to us or at all. Any of these occurrences could have a material adverse impact on our operating results, revenues and costs. See also “—Acts of piracy on ocean-going vessels could adversely affect our business.”
Additionally, in Europe, large sovereign debts and fiscal deficits, low growth prospects and high unemployment rates in a number of countries have contributed to the rise of Eurosceptic parties, which would like their countries to leave the Euro. Brexit further increases the risk of additional trade protectionism. Brexit, or similar events in other jurisdictions, could impact global markets, including foreign exchange and securities markets; any resulting changes in currency exchange rates, tariffs, treaties and other regulatory matters could in turn adversely impact our business and operations.
Also, China and the US have implemented certain increasingly protective trade measures with continuing trade tensions, including significant tariff increases, between these countries. These trade barriers to protect domestic industries against foreign imports, depress shipping demand. Protectionist developments, such as the imposition of trade tariffs or the perception they may occur, may have a material adverse effect on global economic conditions, and may significantly reduce global trade. Moreover, increasing trade protectionism may cause an increase in (a) the cost of goods exported from regions globally, (b) the length of time required to transport goods and (c) the risks associated with exporting goods. Such increases may significantly affect the quantity of goods to be shipped, shipping time schedules, voyage costs and other associated costs, which could have an adverse impact on our charterers'charterers’ business, operating results and financial condition and could thereby affect their ability to make timely charter hire payments to us and to renew and increase the number of their time charters with us. This could have a material adverse effect on our business, results of operations, financial condition and our ability to pay any cash distributions to our shareholders.operating results.
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In addition, public health threats such as influenza and other highly communicable diseases or viruses, outbreaks of which have from time to time occurred in various parts of the world in which we operate, including China, Japan and South Korea, which may even become pandemics, such as the COVID-19 virus, could lead to a significant decrease of demand for the transportation of dry bulk commodities, crude-oil and other petroleum products. Such events have and may also in the future adversely impact our operations, including timely rotation of our crews, the timing of completion of any outstanding or future newbuilding projects or repair works in drydock as well as the operations of our customers. Delayed rotation of crew may adversely affect the mental and physical health of our crew and the safe operation of our vessels as a consequence.
A cyber-attack could materially disrupt our business.business and may result to a significant financial cost to us.
We rely on information technology systems and networks in our operations, our vessels and administration of our business. Information systems are vulnerable to security breaches by computer hackers and cyber terrorists. We rely on industry accepted security measures and technology to securely maintain confidential and proprietary information maintained on our information systems. However, these measures and technology may not adequately prevent security breaches. Our business operations could be targeted by individuals or groups seeking to sabotage or disrupt our information technology systems and networks, to steal data, or to steal data.ask for ransom. As a result of the ongoing COVID-19 pandemic, governmental actions have occasionally urged organizations across industries to have their employees to operate on a rotational basis remotely, which significantly increases the risk of cybersecurity attacks. A successful cyber‐attack could materially disrupt our operations, including the safety of our operations, or lead to unauthorized release, of informationalteration or alterationunavailability of information in our systems. Any such attack or other breach of our information technology systems could have a material adverse effect on our business and results of operations.operating results. In addition, the unavailability of theour information systems or the failure of these systems to perform as anticipated for any reason could disrupt our business and could result in decreased performance and increased operating costs, causing our business and operating results of operations to suffer. Any significant interruption or failure
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In addition, recent action by the IMO's IMO’s Maritime Safety Committee and United States agencies indicates that cybersecurity regulations for the maritime industry are likely to be further developed in the near future in an attempt to combat cybersecurity threats. For example, cyber-risk managementAny inability to prevent security breaches (including the inability of our third-party vendors, suppliers or counterparties to prevent security breaches) could also cause existing clients to lose confidence in the Company’s IT systems must be incorporated by ship-owners and managers by 2021.could adversely affect our reputation, cause losses to us or our customers and/or damage our brand. This might require us to create additional procedures for monitoring cybersecurity, which could require additional expenses and/or capital expenditures. The impact of such regulations is harddifficult to predict at this time.
Major outbreaks of diseases (such as COVID-19) and governmental responses thereto, have affected our crews and operations, and could adversely affect our business.business and financial condition.
Since the beginning of calendar year 2020, the outbreak of the COVID-19 pandemic around the world has negatively affected economic conditions, the supply chain, the labor market and the demand for certain shipping sectors both regionally and globally, has caused delays and uncertainties relating to newbuildings, dry-dockings and other functions of shipyards, and may continue to impact our operations and the operations of our customers and suppliers.globally. The COVID-19 pandemic has resulted in numerous actions taken by governments and governmental agencies in an attempt to mitigate the spread of the virus, including travel bans, quarantines and other emergency public health measures, and a number of countries implemented lockdown measures. These measures have resulted in a significant reduction in global economic activity and extreme volatility in the global financial markets. IfIn the shipping industry, the pandemic has caused delays and uncertainties relating to the operation of the vessels, newbuilding projects, our ability to timely dry-dock our vessels and has affected our ability to timely rotate the crews of our vessels.
We expect that the COVID-19 pandemic continues on a prolonged basis or becomes more severe, the adversewill continue to impact on the global economy and the rate environment for dry bulk and tanker vessels may deteriorate further and our operations and cash flows may be negatively impacted.the operations of our customers and suppliers and increase our operating costs. The extent of COVID-19'sCOVID-19’s continuous impact on our financial and operational results, which could be material in the long run, will depend on the length of time that the pandemic continues, the ability to effectively vaccinate a large percentage of the population and whether subsequent waves of the infectionvirus happen globally or in certain geographic regions. Uncertainties regarding the economic impact of the ongoing COVID-19 pandemic are likely to result in sustained market volatility, which could impact our business, financial condition and cash flows to a greater extent. Governments arehave been approving large stimulus packages to mitigate the effects of the sudden decline in economic activity caused by the pandemic; however, we cannot predict the extent to which these measures will continue or will be sufficient to restore or sustain the business and financial condition of companies in the shipping industry. These measures, though contemplated to be temporary in nature, may continue and increase as countries attempt to contain the outbreak or any reoccurrences thereof.
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At this stage, it isIt remains difficult to determine the full impact of COVID-19 on our business in the long run. Effects of the current ongoing pandemic have included or may include, among others:
deterioration of economic conditions and activity and of demand for shipping;
operational disruptions to us or our customers due to worker health risks and the effects of new regulations, directives or practices implemented in response to the pandemic (such as travel restrictions for individuals, delays in replacing crews and vessels, and quarantining and physical distancing);
potential
delays in (a) the loading and discharging of cargo on or from our vessels, (b) vessel inspections and related certifications by class societies, customers or government agencies and (c) maintenance, modifications or repairs to, or dry-docking of, our existing vessels due to worker health or other business disruptions;
reduced cash flow as a result of the above and worsened financial condition, including potential liquidity constraints;
potential non-performance by counterparties relying on force majeure clauses and potential deterioration in the financial condition and prospects of our customers or other business partners;
credit tightening or declines in global financial markets, including to the prices of our publicly traded securities and the securities of our peers, could make it more difficult for us to access capital; and
potential reduced ability to opportunistically sell any of our vessels on the second-hand market, either as a result of a lack of buyers or a general decline in the value of second-hand vessels;
potential decreases in the market values of our vessels and any related impairment charges or breaches relating to vessel-to-loan financial covenants;
potential disruptions, delays or cancellations in the construction of new vessels, which could reduce our future growth opportunities;opportunities.
difficulty
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The occurrence or continued occurrence of any of the foregoing events or other epidemics or an increase in embarking and disembarkingthe severity or duration of the COVID-19 pandemic could have a material adverse effect on our shipsbusiness, cash flows, financial condition and operating results.
In particular, we face significant risks to our onshore or offshore personnel and operations due to quarantine restrictions placed on personsthe COVID-19 pandemic, which have resulted in increased operational costs and limitations on commercial aviationdecreased revenues by reason of off-hires associated with crew rotation and related logistical complications associated with supplying our vessels with spares or other forms of public transportation; although the restrictions have in certain cases delayed crew embarking and disembarking on our ships, they have not functionally affected our ability to sufficiently crew our vessels;
international transportation of personnel could be limited or otherwise disrupted. In particular, oursupplies. Our crews generally work on a rotation basis, relying largely on international air transport for crew changes plan fulfillment. AnyQuarantine restrictions placed on persons and limitations on commercial aviation and other forms of public transportation have at times delayed our crew in embarking or disembarking on our ships and resulted in additional operating complexities. While such delays have not functionally affected our ability to sufficiently crew our vessels, such disruptions could impacthave affected the cost of rotating our crew and possiblycould impact our ability to maintain a full crew synthesis on-board all our vessels at any given time. It may also be difficult for our in-house technical teams to travel to shipyards to observe vessel maintenance, and we may need to hire local experts, which local experts may vary in skill and are difficult to supervise remotely for work we ordinarily address in-house; and
potential non-performance by counterparties relying on force majeure clauses and potential deterioration in the financial condition and prospects of our customers or other business partners.
The ongoing COVID-19 pandemic and measures to contain its spread have negatively impacted regional and global economies and trade patterns in markets in which we operate, the way we operate our business, and the businesses of our charterers and suppliers. These negative impacts could continue or worsen, even after the pandemic itself diminishes or ends. Companies, including us, have also taken precautions, such as requiring employees to work remotely and imposing travel restrictions, while some other businesses have been required to close entirely. Moreover, we face significant risks to our onshore or offshore personnel and operations due to the COVID-19 pandemic. Our crews face risk of exposure to COVID-19 as a result of travel to ports in which cases of COVID-19 have been reported. Our shore-based personnel likewise face risk of such exposure, as we maintain offices in areas that have been impacted by the spread of COVID-19.
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Measures against COVID-19 in a number of countries have restricted crew rotations on our vessels, which may continue or become more severe. As a result, in 2020,In 2021, we experienced, and maywe expect to continue to experience, disruptions to our normal vessel operations caused by deviation time associated with positioning our vessels to countries in which we can undertake a crew rotation in compliance with such measures.applicable measures against COVID-19. Delays in crew rotations have led to issues with crew fatigue and may continue to do so, which may result in delays or other operational issues. We have had and expect to continue to have increased expenses due to incremental fuel consumption and days in which our vessels are unable to earn revenue in order to deviate to certain ports on which we would ordinarily not call during a typical voyage. It may also be difficult for our team to inspect new vessels we acquire as part of our growth strategy or our in-house technical teams to travel to shipyards to observe vessel maintenance, and we may need to hire local experts, who may vary in skill and are difficult to supervise remotely for work we ordinarily address in-house.
Our crews also face risk of exposure to COVID-19 as a result of travel to ports in which cases of COVID‑19 have been reported. Our shore-based personnel likewise face risk of such exposure, as we maintain offices in areas that have been impacted by the spread of COVID-19.
Although our vessels'vessels’ deviations, / repositioning and/or delays in ports that are or will be open for crew rotations should be considered as the most notable impact of the COVID-19 pandemic on us, we have incurred and should alsoexpect to continue to expect to incur considerable expenses in relation to health protocols imposed by both departure and arrival countries for the incoming and outgoing of crew members, which shouldmust be strictly followed (i.e.(e.g., repeated PCR tests, quarantine periods of up to 21days,21 days, governmental special permissions and/or visas, personal protective equipment etc.). Furthermore, reduced flights availability, limitation of selected routes for our flight schedule and imposed health measures by air carrier companies, caused us and may continue to cause us significant increases in the average airfare costs.
The impact of the ongoing COVID-19 pandemic has also resulted in reduced industrial activity in China with temporary closures of factories and other facilities, labor shortages and restrictions on travel. We believe these disruptions along with other seasonal factors, including lower demand for some of the cargoes we carry such as iron ore and coal, have contributed to lower dry bulk rates in 2020.
Organizations across industries, including ours, are rightly focusing on their employees' well-being, whilst making sure that their operations continue undisrupted and at the same time, adapting to the new ways of operating. As such employees are encouraged or even required to operate remotely which significantly increases the risk of cyber security attacks.
While we cannot fully assess the overall impact that the ongoing COVID-19 pandemic will have on our financial condition and results of operations and on the dry bulk and tanker industries in general in the long run, we assess that the dry bulk and tanker charter rates have been reduced significantly as a result of the ongoing COVID-19 pandemic and that the shipping industry in general and our Company specifically are likely to continue to be exposed to volatility in the near to medium term. Indicatively, vessels in our Fleet which came up for charter renewal in the 2020 were employed at comparably less favorable charter rates than those achieved during 2019 and those expected before the ongoing COVID-19 pandemic which had a negative impact on voyage revenues earned in 2020.
Further, containment measures and quarantine restrictions adopted by many countries worldwide have caused significant impact on our ability to embark and disembark crew members and on our seafarers themselves. As a result, since the outbreak of COVID-19 and as of the date of this annual report, we have encountered certain prolonged delays and surrounding complexities in embarking and disembarking crew onto our ships which further resulted in increased operational costs and decreased revenues by reason of off-hires associated with crew rotation and related logistical complications associated with supplying our vessels with spares or other supplies.
The occurrence or continued occurrence of any of the foregoing events or other epidemics or an increase in the severity or duration of the COVID-19 or other epidemics could have a material adverse effect on our business, results of operations, cash flows, financial condition, value of our vessels, and ability to pay dividends (as and if declared).
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If our vessels callOur charterers calling on ports located in countries or territories that are the subject of sanctions or embargoes imposed by the U.S. government (including OFAC) or other governmental authorities itor failure to comply with the U.S. Foreign Corrupt Practices Act (the “FCPA”) or similar laws could lead to monetary fines or penalties and adversely affect our reputationreputation. Such failures and other events could adversely affect the market for our common shares.
While none
Certain countries (including certain regions of our vessels have called on ports located in countries or territories thatUkraine, Russia, Belarus, Cuba, Iran, North Korea and Syria), entities and persons are the subject of country-wide or territory-widetargeted by economic sanctions orand embargoes imposed by the United States, the European Union and other jurisdictions, and a number of those countries have been identified as state sponsors of terrorism by the U.S. government or other governmental authorities ("Sanctioned Jurisdictions") in violationDepartment of State. Such economic sanctions or embargo laws in 2020, and although we intend to maintain compliance with all applicable sanctions and embargo laws, and we endeavor to take precautions reasonably designed to mitigate such risks, it is possible that, in the future, our vessels may call on ports located in Sanctioned Jurisdictions on charterers' instructions and/or without our consent. If such activities result in a violation of sanctions or embargo laws, we could be subject to monetary fines, penalties, or other sanctions, and our reputation and the market for our ordinary shares could adversely affected.
Sanctions and embargo laws and regulations vary in their application aswith regard to countries, entities or persons and the scope of activities they do not all applysubject to the same covered persons or proscribe the same activities, and suchsanctions. These sanctions and embargo laws and regulations may be amendedstrengthened, relaxed or expandedotherwise modified over time. Any violation of sanctions or embargoes could result in the Company incurring monetary fines, penalties or other sanctions. In addition, certain institutional investors may have investment policies or restrictions that prevent them from holding securities of companies that have contacts with countries or entities or persons within these countries that are identified by the U.S. government as state sponsors of terrorism. We are required to comply with such policies in order to maintain access to capital.
 
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Current or future counterparties of ours may be affiliated with persons or entities that are or may be in the future the subject of sanctions imposed by the governments of the U.S., EU, and/or other international bodies. IfFurther, it is possible that, in the future, our vessels may call on ports located in sanctioned jurisdictions on charterers’ instructions, without our consent and in violation of their charter party. Moreover, our charterers may violate applicable sanctions and embargo laws and regulations as a result of actions that do not involve us or our vessels. As a result, we determine that such sanctions require usmay be required to terminate existing or future contracts to which we, or our subsidiaries, are party or ifparty.
We operate in a number of countries throughout the world, including countries known to have a reputation for corruption. We are committed to doing business in accordance with applicable anti-corruption laws, and have adopted a code of business conduct and ethics. However, we are foundsubject to the risk that we, or our affiliated entities, or our or our affiliated entities’ respective officers, directors, employees or agents actions may be deemed to be in violation of such anti-corruption laws, including the FCPA. Any such violation could result in substantial fines, sanctions, civil and/or criminal penalties and curtailment of operations in certain jurisdictions.
If the company, our affiliated entities, or our or their respective officers, directors, employees and agents, or any of our charterers are deemed to have violated economic sanctions and embargo laws, or any applicable sanctions,anti-corruption laws, our results of operations may be adversely affected due to the resultant monetary fines, penalties or other sanctions. In addition, we may suffer reputational harm.
Although we believe that we have been in compliance with all applicable sanctions and embargo laws and regulations, and intend to maintain such compliance,harm as a result of any such violation could result in fines, penaltiesactual or other sanctions that could severely impactalleged violations. This may affect our ability to access U.S. capital markets and conduct our business, and could result in some investors deciding, or being required, to divest their interest, or not to invest, in us. In addition, certain institutional investors may have investment policies or restrictions that prevent them from holding securities of companies that have contracts with countries identified by the U.S. government as state sponsors of terrorism. The determination by these investors not to invest in, or to divest from, our common shares may adversely affect the price at which our common shares trade. Moreover, our charterers may violate applicable sanctions and embargo laws and regulations as a result of actions that do not involve us or our vessels, and those violations could in turn negatively affect our reputation. Investor perception of the value of our common shares may also be adversely affected by the consequences of war, the effects of terrorism, civil unrest and governmental actions in tthe countries or territories thatin which we operate in. Any of these factors could adversely affect our business, financial condition, and operating results.
Furthermore, detecting, investigating and resolving actual or alleged violations is expensive and can consume significant time and attention of our senior management and adversely affect our business, results of operations or financial condition as a result.
Compliance with safety and other vessel requirements imposed by classification societies may be costly and could reduce our net cash flows and negatively impact our results of operations.
The hull and machinery of every commercial vessel must be certified as being "in class"“in class” by a classification society authorized by its country of registry. The classification society certifies that a vessel is safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of the vessel and the Safety of Life at Sea Convention.
A vessel must undergo annual surveys, intermediate surveys and special surveys. In lieu of a special survey, a vessel'svessel’s machinery may be placed on a continuous survey cycle, under which the machinery would be surveyed periodically over a five-year period. We expect our vessels to be on special survey cycles for hull inspection and continuous survey cycles for machinery inspection. Most vessels are also required to be dry-docked, or inspected by divers, every two to three years for inspection of its underwater parts.
While the Company believes that it has adequately budgeted for compliance with all currently applicable safety and other vessel operating requirements, newly enacted regulations in the future applicable to the Company and its vessels may result in significant and unanticipated expense in the future.future expense. If any vessel does not maintain its class or fails any annual, intermediate, or special survey, the vessel will be unable to trade between ports and will be unemployable, which could have a material adverse effect on our business, results of operations, cash flows, and financial condition.
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Regulations relating to ballast water discharge may adversely affect our revenues and profitability.
The IMO has imposed updated guidelines for ballast water management systems specifying the maximum amount of viable organisms allowed to be discharged from a vessel's ballast water. Depending on the date of the International Oil Pollution Prevention (IOPP) renewal survey, existing vessels constructed before September 8, 2017 must comply with the updated D-2 standard on or after September 8, 2019. For most vessels, compliance with the D-2 standard will involve installing on-board systems to treat ballast water and eliminate unwanted organisms. Ships constructed on or after September 8, 2017 are to comply with the D-2 standards on or after September 8, 2017.
Currently, our vessels will be required to comply with the regulation at our IOPP renewal survey scheduled for August 8, 2022 for the Magic P, July 15, 2022 for the Magic Moon and June 13, 2022 for the Magic Rainbow. The costs of compliance may be substantial and adversely affect our revenues and profitability. The eight remaining vessels in our Fleet and the vessels that we expect to take delivery of pursuant to our previously entered acquisition transactions are currently in compliance with this regulation.
Furthermore, United States regulations are currently changing. Although the 2013 Vessel General Permit ("VGP") program and U.S. National Invasive Species Act ("NISA") are currently in effect to regulate ballast discharge, exchange and installation, the Vessel Incidental Discharge Act ("VIDA"), which was signed into law on December 4, 2018, requires that the EPA develop national standards of performance for approximately 30 discharges, similar to those found in the VGP within two years. On October 26, 2020, the EPA published a Notice of Proposed Rulemaking for Vessel Incidental Discharge National Standards of Performance under VIDA. Within two years after the EPA publishes its final Vessel Incidental Discharge National Standards of Performance, the U.S. Coast Guard must develop corresponding implementation, compliance and enforcement regulations regarding ballast water. The new regulations could require the installation of new equipment, which may cause us to incur substantial costs and to the extent we are not able to pass these costs on to our customers may materially and adversely affect our results of operations and/or cash flows.
The IMO 2020 regulations may cause us to incur substantial costs and to procure low-sulfur fuel oil directly on the wholesale market for storage at sea and onward consumption on our vessels.
Effective January 1, 2020, the IMO implemented a new regulation for a 0.50% global sulfur cap on emissions from vessels. Under this new global cap, vessels must use marine fuels with a sulfur content of no more than 0.50% against the former regulations specifying a maximum of 3.50% sulfur in an effort to reduce the emission of sulfur oxide into the atmosphere.
Although the cost of low sulfur marine fuels has remained relatively low in 2020, we may incur costs to comply with these revised standards. Additional or new conventions, laws and regulations may be adopted that could require, among others, the installation of expensive emission control systems and could adversely affect our business, results of operations, cash flows and financial condition.
Currently, none of our vessels are equipped with scrubbers and, as of January 1, 2020, we have transitioned to burning IMO compliant fuels. We continue to evaluate different options in complying with IMO and other rules and regulations. Low sulfur fuel is more expensive than standard marine fuel containing 3.5% sulfur content and may become more expensive or difficult to obtain as a result of increased demand. Although the cost differential between low sulfur fuel and standard marine fuel in 2020 was less than anticipated, that differential has increased during the first quarter of 2021. If the cost differential between low sulfur fuel and high sulfur fuel is significantly higher than anticipated in the future, or if low sulfur fuel is not available at ports on certain trading routes, it may not be feasible or competitive to operate our vessels on certain trading routes without installing scrubbers or without incurring deviation time to obtain compliant fuel. Scrubbers may not be available to be installed on such vessels at a favorable cost or at all if we seek them at a later date.
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Fuel is a significant, if not the largest, expense in our shipping operations when vessels are under voyage charter and is an important factor in negotiating charter rates. Our operations and the performance of our vessels, and as a result our results of operations, cash flows and financial position, may be negatively affected to the extent that compliant sulfur fuel oils are unavailable, of low or inconsistent quality, if de-bunkering facilities are unavailable to permit our vessels to accept compliant fuels when required, or upon occurrence of any of the other foregoing events. Costs of compliance with these and other related regulatory changes may be significant and may have a material adverse effect on our future performance, results of operations, cash flows and financial position. As a result, an increase in the price of fuel beyond our expectations may adversely affect our profitability at the time of charter negotiation. Further, fuel may become much more expensive in the future, which may reduce the profitability and competitiveness of our business versus other forms of transportation, such as truck or rail.
While we carry cargo insurance to protect us against certain risks of loss of or damage to the procured commodities, we may not be adequately insured to cover any losses from such operational risks, which could have a material adverse effect on us. Any significant uninsured or under-insured loss or liability could have a material adverse effect on our business, results of operations, cash flows and financial condition and our available cash.operating results.
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We are subject to laws, regulations and regulations,standards (including environmental standards such as IMO 2020, standards regulating ballast water discharge, etc.), which can adversely affect our business, results of operations, cash flows, and financial condition,condition. In particular, climate change and greenhouse gas (“GHG”) restrictions may adversely impact our ability to pay dividends (asoperations and if declared)markets.

Our operations are subject to numerous international, national, state and local laws, regulations, treaties and conventions in force in international waters and the jurisdictions in which our vessels operate or are registered, which can significantly affect the ownership and operation of our vessels. TheseSee “Item 4. Information on the Company—B. Business Overview—Environmental and Other Regulations in the Shipping Industry” for a discussion of certain of these laws, regulations include, but are not limited to, the U.S. Oil Pollution Act of 1990, or OPA, the Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, the U.S. Clean Air Act, the U.S. Clean Water Act and the U.S. Maritime Transportation Security Act of 2002, or the MTSA, and treaties and conventions of the United Nations International Maritime Organization, or the IMO, including the International Convention for the Prevention of Pollution from Ships of 1973, as from time to time amended and generally refer to as MARPOL, the International Convention for the Safety of Life at Sea of 1974, or the SOLAS Convention, and the International Convention on Load Lines of 1966.standards. Compliance with such laws, regulations and standards, where applicable, may require installation of costly equipment or implementation of operational changes and may affect the resale value or useful lives of our vessels. These costs could have a material adverse effect on our business, results of operations, cash flows financial condition, and financial condition.operating results. A failure to comply with applicable laws and regulations may result in administrative and civil penalties, criminal sanctions or the suspension or termination of our operations.
Environmental laws often impose strict liability for emergency response and remediation of spills and releases of oil and hazardous substances, which could subject us to liability without regard to whether we were negligent or at fault. Under OPA, for example, owners, operatorsSee “—Risks involved in operating ocean-going vessels could affect our business and bareboat charterersreputation. In particular, the operation of tankers has unique operational risks associated with the transportation of oil.”
Fuel is a significant, if not the largest, expense in our shipping operations when vessels are jointlyunder voyage charter and severally strictly liable for the discharge of oil within the 200-mile exclusive economic zone around the U. S. Furthermore, the 2010 explosionis an important factor in negotiating charter rates. In connection with IMO 2020 regulations and requirements relating fuel sulfur levels, as of the Deepwater Horizondate of this report one of our vessels is equipped with scrubbers and for our remaining vessels that are not equipped with scrubbers, we have transitioned to burning IMO compliant fuels. Low sulfur fuel is more expensive than standard marine fuel containing 3.5% sulfur content and may become more expensive or difficult to obtain as a result of increased demand.
The IMO has also imposed updated guidelines for ballast water management systems specifying the subsequent releasemaximum amount of oil intoviable organisms allowed to be discharged from a vessel’s ballast water. Depending on the Gulf of Mexico, or other similar events, may result in further regulationdate of the shippingInternational Oil Pollution Prevention (IOPP) renewal survey, existing vessels constructed before September 8, 2017, must comply with the updated D-2 standard on or after September 8, 2019. For most vessels, compliance with the D-2 standard involves installing on-board systems to treat ballast water and offshore industry,eliminate unwanted organisms. Currently, four of our dry bulk vessels and modificationsfour of our tanker vessels will be required to statutory liability schemes, which could have a material adverse effect oncomply with the regulation at our business, financial condition, resultsIOPP renewal surveys scheduled for 2022. The costs of operationscompliance may be substantial and cash flows. An oil spill could resultadversely affect our revenues and profitability. The 21 remaining vessels in significant liability, including fines, penalties and criminal liability and remediation costs for natural resource damages under other federal, state and local laws, as well as third-party damages.our fleet are currently in compliance with this regulation.
Climate change and greenhouse gas restrictions may adversely impact our operations and markets.
Due to concern over the risk of climate change, a number of countries and the IMO have adopted regulatory frameworks to reduce greenhouse gas emissions. These regulatory measures may include, among others, adoption of cap and tradecap-and-trade regimes, carbon taxes, increased efficiency standards, and incentives or mandates for renewable energy. In addition, although the emissions of greenhouse gasesGHG from international shipping currently are not subject to the Paris Agreement (discussed below in "Item 4. Information on the Company—B. Business Overview—Environmental and Other Regulations in the Shipping Industry—Greenhouse Gas Regulation"), or the Kyoto Protocol to the United Nations Framework Convention on Climate Change, thatwhich required adopting countries to implement national programs to reduce emissions of certain gases, a new treaty may be adopted in the future that includes restrictions on shipping emissions.
Adverse effects upon
In June 2021, IMO’s Marine Environment Protection Committee (“MEPC”) adopted amendments to the oil industry relatingInternational Convention for the Prevention of Pollution from Ships (MARPOL) Annex VI that will require ships to climate changereduce their GHG emissions. These amendments combine technical and greenhouse gas restrictionsoperational approaches to improve the energy efficiency of ships, also providing important building blocks for future GHG reduction measures. The new measures require the IMO to review the effectiveness of the implementation of the Carbon Intensity Indicator (“CII”) and Energy Efficiency Existing Ship Index (“EEXI”) requirements by 1 January 2026 at the latest.
The EEXI and CII regulations require reductions in the CO2 emissions of vessels. Based on the pertinent official calculations and estimations, merchant vessels built before 2013, including certain of our older vessels, do not satisfy the upcoming EEXI requirements which will come into force on January 1, 2023. To ensure compliance with EEXI requirements most owners/operators, including us, may choose to limit engine power, a solution less costly than applying energy saving devices and/ or effecting certain alterations on existing propeller designs. The engine power limitation is predicted to lead to reduced ballast and laden speeds (at scantling draft,) in the non-compliant vessels which will affect their commercial utilization but also adverselydecrease the global availability of vessel capacity. Furthermore, required software and hardware alterations as well as documentation and recordkeeping requirements will increase a vessel’s capital and operating expenditures.
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On November 13, 2021, the Glasgow Climate Pact was announced following discussions at the 2021 United Nations Climate Change Conference (“COP26”). The Glasgow Climate Pact calls for signatory states to voluntarily phase out unabated coal usage and fossil fuels subsidies. A shift away from these products could potentially affect the demand for our tanker services.
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We are subjectdry bulk, crude and product tankers and negatively impact our future business, operating results, cash flows and financial position. COP26 also produced the Clydebank Declaration, in which 22 signatory states (including the United States and United Kingdom) announced their intention to international safety standardsvoluntarily support the establishment of zero-emission shipping routes. Governmental and investor pressure to voluntarily participate in these green shipping routes could cause the failureCompany to comply with these regulations may subject usincur significant additional expenses to increased liability, may adversely affect our insurance coverage and may result in a denial of access to, or detention in, certain ports.
The operation of our vessels is affected by the requirements set forth in the International Safety Management Code, or the ISM Code, promulgated by the IMO under the SOLAS Convention. The ISM Code requires ship owners, ship managers and bareboat charterers to develop and maintain an extensive "Safety Management System" that includes the adoption of a safety and environmental protection policy setting forth instructions and procedures for safe operation of vessels and describing procedures for dealing with emergencies.  In addition, vessel classification societies impose significant safety and other requirements on“green” our vessels. The failure to comply with these regulations may subject us to increased liability, may adversely affect our insurance coverage and may result in a denial of access to, or detention in, certain ports.
Developments in safety and environmental requirements relating to the recycling and demolition of vessels may result in escalated and unexpected costs.

The 2009 Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, or the Hong Kong Convention, aims to ensure ships, being recycled once they reach the end of their operational lives, do not pose any unnecessary risks to the environment, human health and safety. TheOn November 28, 2019, the Hong Kong Convention has yet to bewas ratified by the required number of countries to enter into force.but as of January 10, 2022, was not yet in force as the ratifying states do not represent 40% of world merchant shipping by gross tonnage. Upon the Hong Kong Convention'sConvention’s entry into force, each ship sent for recycling will have to carry an inventory of its hazardous materials. The hazardous materials, whosethe use or installation of which are prohibited in certain circumstances, are listed in an appendix to the Hong Kong Convention. Ships will be required to have surveys to verify their inventory of hazardous materials initially, throughout their lives and prior to the ship being recycled. The Hong Kong Convention, which is currently open for accession by IMO Member States, will enter into force 24 months afterWhen implemented, the date on which 15 IMO Member States, representing at least 40% of world merchant shipping by gross tonnage, have ratified or approved accession. As of the date of this annual report, 15 countries have ratified or approved accession of the Hong Kong Convention but theforegoing requirement of 40% of world merchant shipping by gross tonnage has not yet been satisfied.
On November 20, 2013, the European Parliament and the Council of the EU adopted the Ship Recycling Regulation, which retains the requirements of the Hong Kong Convention and requires that certain commercial seagoing vessels flying the flag of an EU Member State may be recycled only in facilities included on the European list of permitted ship recycling facilities.
Apart from that, any vessel, including ours, is required to set up and maintain an Inventory of Hazardous Materials ("IHM") from December 31, 2018 for EU flagged new ships and from December 31, 2020 for EU flagged existing ships and Non-EU flagged ships calling at a port or anchorage of an EU member state. Such a system includes information on the hazardous materials with a quantity above the threshold values specified in relevant EU Resolution and are identified in the ship's structure and equipment. This inventory should be properly maintained and updated, especially after repairs, conversions or unscheduled maintenance on board the ship.
These regulatory developments, when implemented, may lead to cost escalation by shipyards, repair yards and recycling yards. This may then result in a decrease in the residual scrap value of a vessel, and a vessel could potentially not cover the cost to comply with latest requirements, which may have an adverse effect on our future performance, results of operations, cash flows, financial position and operating results.
Further, on November 20, 2013, the European Parliament and the Council of the EU adopted the Ship Recycling Regulation, which, among other things, requires any non-EU flagged vessels calling at a port or anchorage of an EU member state, including ours, to set up and maintain an Inventory of Hazardous Materials from December 31, 2020. Such a system includes information on the hazardous materials with a quantity above the threshold values specified in relevant EU Resolution and are identified in the ship’s structure and equipment. This inventory must be properly maintained and updated, especially after repairs, conversions or unscheduled maintenance on board the ship.
We are subject to international safety standards and the failure to comply with these regulations may subject us to increased liability, may adversely affect our insurance coverage and may result in a denial of access to, or detention in, certain ports.
The operation of our vessels is affected by the requirements set forth in the International Safety Management Code, or the ISM Code, promulgated by the IMO under the SOLAS Convention. The ISM Code requires ship owners, ship managers and bareboat charterers to develop and maintain an extensive “Safety Management System” that includes the adoption of a safety and environmental protection policy setting forth instructions and procedures for safe operation of vessels and describing procedures for dealing with emergencies. In addition, vessel classification societies impose significant safety and other requirements on our vessels. Failure to comply with these regulations may subject us to increased liability, may adversely affect our insurance coverage and may result in a denial of access to, or detention in, certain ports, and have a material adverse effect on our business, financial position.condition and operating results.
Maritime claimants could arrest our vessels, which could interrupt our cash flow and business.
Crew members, suppliers of goods and services to a vessel, shippers and receivers of cargo and other parties may be entitled to a maritime lien against a vessel for unsatisfied debts, claims or damages. In many jurisdictions, a maritime lien holder may enforce its lien by "arresting"“arresting” or "attaching"“attaching” a vessel through foreclosurejudicial proceedings. The arrest or attachment of our vessels could result in ahave significant loss of earningsramifications for the relatedCompany, including off-hire period.periods and/or potential cancellations of charters, high costs incurred in discharging the maritime lien, other expenses to the extent such arrest or attachment is not covered under our insurance coverage, breach of covenants in certain of our credit facilities and reputational damage. This in turn could negatively affect the market for our shares and adversely affect our business, financial condition, results of operations, cash flows and ability to service or refinance our debt. In addition, in jurisdictions where the "sister ship"“sister ship” theory of liability applies, such as South Africa, a claimant may arrest the vessel that is subject to the claimant'sclaimant’s maritime lien and any "associated"“associated” vessel, which is any vessel owned or controlled by the same owner. In countries with "sister ship"“sister ship” liability laws, claims might be asserted against us or any of our vessels for liabilities of other vessels that we will then own.own, compounding the negative effects of an arrest or attachment on the Company.
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Governments could requisition our vessels during a period of war or emergency resulting in a loss of earnings.
A government of a vessel'svessel’s registry could requisition for title or seize a vessel. Requisition for title occurs when a government takes control of a vessel and becomes the owner. A government could also requisition a vessel for hire. Requisition for hire occurs when a government takes control of a vessel and effectively becomes the charterer at dictated charter rates. Generally, requisitions occur during a period of war or emergency. Government requisition of our vessels could have a material adverse effect on our business, results of operations, cash flows, financial condition and financial condition.operating results.
Increased inspection procedures and tighter import and export controls could increase costs and disrupt our business.
International shipping is subject to various security and customs inspection and related procedures in countries of origin and destination and trans-shipment points. Inspection procedures may result in the seizure of contents of our vessels, delays in the loading, offloading, trans-shipment or delivery and the levying of customs duties, fines or other penalties against us.
It is possible that changes to inspection procedures could impose additional financial and legal obligations on us. Changes to inspection procedures could also impose additional costs and obligations on our customers and may, in certain cases, render the shipment of certain types of cargo uneconomical or impractical. Any such changes or developments may have a material adverse effect on our business, financial condition and results of operations.operating results.
Our business has inherent operational risks, which may not be adequately covered by insurance.
Our vessels and their cargoes are at risk of being damaged or lost because of events such as marine disasters, badadverse weather conditions, mechanical failures, human error, environmental accidents, war, terrorism, piracy and other circumstances or events. In addition, transporting cargoes across a wide variety of international jurisdictions creates a risk of business interruptions due to political circumstances in foreign countries, hostilities, labor strikes and boycotts, the potential for changes in tax rates or policies, and the potential for government expropriation of our vessels. Any of these events may result in loss of revenues, increased costs and decreased cash flows to our customers, which could impair their ability to make payments to us under our charters.
In the event of a casualty to our vessels or other catastrophic event, we will rely on our insurance to pay the insured value of the vessel or the damages incurred.
We procure insurance for our vessels employed under time charters against those risks that we believe the shipping industry commonly insures against. This insurance includes marine hull and machinery insurance, protection and indemnity insurance, which include environmental damage, pollution risks andinsurance coverage, crew insurance, and war risk insurance. Currently, the amount of coverage for liability for pollution, spillage and leakage available to us on commercially reasonable terms through protection and indemnity associations and providers of excess coverage is $1 billion per occurrence.
We maintain hull and machinery insurance, protection and indemnity insurance for For certain of our vessels, which provides environmental damage and pollution insurance coverage and war risk insurance. We do notwe also maintain for our vessels, insurance against loss of hire, which covers business interruptions that result from the loss of use of a vessel. We
Despite the above policies, we may not be adequately insured againstin amounts sufficient to address all risks. Werisks and may not be able to obtain adequate insurance coverage for our Fleetfleet in the future and weor may not be able to obtain certain coverage at reasonable rates. For example, in the past more stringent environmental regulations have led to increased costs for, and in the future may result in the lack of availability of, insurance coverages. Theagainst risks of environmental damage or pollution.
Further, insurers may not pay particular claims. Our insurance policies contain deductibles for which we will be responsible and limitations and exclusions which may increase our costs or lower our revenues. Moreover, insurers may default on claims they are required to pay.
We cannot assure you that we will be adequately insured against all risks or that we will be able to obtain adequate insurance coverage at reasonable rates for our vessels in the future. For example, in the past more stringent environmental regulations have led to increased costs for, and in the future may result in the lack Any of availability of, insurance against risks of environmental damage or pollution. Additionally, our insurers may refuse to pay particular claims. Any significant loss or liability for which we are not insuredthese factors could have a material adverse effect on our financial condition.
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Risks Relating To Our Company

Failure to comply with the U.S. Foreign Corrupt Practices Act could result in fines, criminal penalties, charter terminations and an adverse effect on our business.
We have grown our fleet exponentially and we may operate in a number of countries throughout the world, including countries known to have a reputation for corruption. We are committed to doing business in accordance with applicable anti-corruption laws and have adopted a code of business conduct and ethicsdifficulty managing our growth properly which is consistent and in full compliance with the U.S. Foreign Corrupt Practices Act of 1977, or the FCPA. We are subject, however, to the risk that we, our affiliated entities or our or their respective officers, directors, employees and agents may take actions determined to be in violation of such anti-corruption laws, including the FCPA. Any such violation could result in substantial fines, sanctions, civil and/or criminal penalties and curtailment of operations in certain jurisdictions, and might adversely affect our business, results of operations or financial condition. In addition, actual or alleged violations could damage our reputation and ability to do business. Furthermore, detecting, investigating and resolving actual or alleged violations is expensive and can consume significant time and attention of our senior management.profitability.
Risk Related To Our Company
We are a recentlycompany formed companyfor the purpose of acquiring, owning, chartering, and operating oceangoing cargo vessels. Since December 31, 2020, and as of the date of this annual report, we have grown our fleet from six vessels to 29 vessels.
Growing any business presents numerous risks such as undisclosed liabilities and obligations, difficulty in obtaining additional qualified personnel and managing relationships with a limited historycustomers and suppliers and integrating newly acquired operations into existing infrastructures. The significant expansion of operations.our fleet may impose significant additional responsibilities on our management and the management and staff of our commercial and technical managers, and may necessitate that we, and/or they, increase the number of our and/or their personnel.
We are a recently formed company and have a limited performance record, operating history and historical financial statements upon which you can evaluate our operations
Our or our ability to implementmanagers’ current operating and achieve our business strategy. We cannot assure you that we willfinancial systems may not be successful in implementing our business strategy. Up to September 4, 2019, we had had only one vessel in our Fleet with a relatively short operating history, andadequate as such, we may face certain operational challenges not faced by companies with a longer operating history and more vessels. As we continue to implement our plan to expand the size of our fleet and our attempts to improve those systems may be ineffective. In addition, if we further expand our Fleet,fleet, we will need to recruit suitable additional seafarers and shore-side administrative and management personnel. We cannot assure youguarantee that we will be able to successfully integratehire suitable employees as we expand our fleet. If we encounter business or financial difficulties, we may not be able to adequately staff our vessels or our shore-side personnel. If we are unable to grow our financial and operating systems or to recruit suitable employees as we expand our fleet, our financial performance may be adversely affected and, among other things, the additional vessels thatamount of our available free cash may be reduced.
We may be dependent on a small number of charterers for the majority of our business.
Historically, a small number of charterers have accounted for a significant part of our revenues. Indicatively, for the years ended December 31, 2021 and 2020, we derived 43% and 58% of our consolidated operating revenues from three and two charterers, respectively. In particular, for the years ended December 31, 2021 and 2020, we derived 55% and 58% of our dry bulk segment operating revenues from three and two charterers, respectively. Further, for year ended December 31, 2021, we derived 100% of our Handysize tanker segment operating revenues from the pool in which both our Handysize tankers participate and 52% of our Aframax/LR2 tanker segment revenues from two charterers. All the charters for our fleet have agreedfixed terms, but may be terminated early due to purchase when they are deliveredcertain events, such as a charterer’s failure to make charter payments to us because of financial inability, disagreements with us or otherwise. The ability of each of our counterparties to perform their obligations under a charter with us will depend on a number of factors that are beyond our control and may include, among other things, general economic conditions, the condition of the shipping industry, prevailing prices for commodities and oil and oil related products and the overall financial condition of the counterparty. Should a counterparty fail to honor its obligations under an agreement with us, we may purchase inbe unable to realize revenue under that charter and could sustain losses. In addition, if we lose an existing charterer, it may be difficult for us to promptly replace the future.
Our Fleet currently consists of nine dry bulk carriers and two tanker vessels andrevenue we are awaiting delivery of three dry bulk carriers.derived from that customer. Any limitation in the availability or operation of these vesselsfactors could have a material adverse effect on our business, results of operationsfinancial condition, cash flows and financial condition.
Our Fleet currently consists of nine dry bulk carriers and two tankers and, upon the completion operating results. For further information, see Note 2 of our recently announced acquisitions, our Fleet will consist of twelve dry bulk carriers and two tankers. If any of our vessels is unable to generate revenues as a result of off-hire time, early termination of the time charterconsolidated financial statements included elsewhere in effect, delays in the delivery of the recently acquired vessels or failure to secure new charters at charter hire rates as favorable as our average historical rates or at all, our future liquidity, cash flows, results of operations, and financial condition could be materially adversely affected.this annual report.
We may not be able to re-charterexecute our growth strategy and we may not realize the benefits we expect from past acquisitions or future acquisitions or other strategic transactions.
As our business grows, we intend to acquire additional dry bulk, tanker and other vessels and expand our activities. Our future growth will primarily depend upon a number of factors, some of which may not be within our control. These factors include our ability to:
identify suitable vessels, including newbuilding slots at reputable shipyards and/or shipping companies for acquisitions at attractive prices;

realize anticipated benefits, such as new customer relationships, cost-savings or cash flow enhancements from past acquisitions;

obtain new and favorable chartersrequired financing for our existing and new operations;

integrate any acquired vessels, assets or businesses successfully with our existing operations, including obtaining any approvals and qualifications necessary to operate vessels that we acquire;

hire, train and retain qualified personnel and crew to manage and operate our growing business and fleet;

improve our operating, financial and accounting systems and controls; and

cope with competition from other companies, many of which have significantly greater financial resources than we do, and may reduce our acquisition opportunities or cause us to pay higher prices.

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Our failure to effectively identify, acquire, develop and integrate any vessels could adversely affect our revenuesbusiness, financial condition, investor sentiment and profitability.operating results. Finally, acquisitions may require additional equity issuances, which may dilute our common shareholders if issued at lower prices than the price they acquired their shares, or debt issuances (with amortization payments), both of which could lower our available cash. See “—Recent share issuances and future issuances of additional shares, or the potential for such issuances, may impact the price of our common shares and could impair our ability to raise capital through subsequent equity offerings. Shareholders may experience significant dilution as a result of any such issuances.”If any such events occur, our financial condition may be adversely affected.
We operate secondhand vessels with an age above the industry average which may lead to increased technical problems for our vessels, higher operating expenses, affect our ability to profitably charter our vessels, to comply with environmental standards and future maritime regulations and result in a more rapid deterioration in our vessels’ market and book values.
Our current fleet consists only of secondhand vessels. While we have inspected our vessels and we intend to inspect any potential future vessel acquisition, this does not provide us with the same knowledge about its condition that we would have had if the vessel had been built for and operated exclusively by us. Generally, purchasers of secondhand vessels do not receive the benefit of warranties from the builders for the secondhand vessels that they acquire.
The average age of our current fleet is 13.9 years. The average age of our dry bulk vessels is 12.3 years, compared to an industry standard of 11.0 years; the average age of our Aframax/LR2 vessels is 17.5 years, compared to an industry standard of 11.5 years; and the average age of our Handysize vessels is 16.1 years, compared to an industry average of 14.7 years. In general, the cost of maintaining a vessel in good operating condition and operating it increases with the age of the vessel, because, amongst other things:
as our vessels age, typically, they become less fuel-efficient and more costly to maintain than more recently constructed vessels due to improvements in engine technology and increased maintenance requirements;

cargo insurance rates increase with the age of a vessel, making our vessels more expensive to operate;

governmental regulations, environmental and safety or other equipment standards related to the age of vessels may also require expenditures for alterations or the addition of new equipment to our vessels and may restrict the type of activities in which our vessels may engage.

Charterers also have age restrictions on the vessels they charter which may result to a lower utilization of our vessels resulting to lower revenues. Our charterers have a high and increasing focus on quality and compliance standards with their suppliers across the entire supply chain, including the shipping and transportation segment. Our continued compliance with these standards and quality requirements is vital for our operations. The charter hire rates and the value and operational life of a vessel are determined by a number of factors including the vessel’s efficiency, operational flexibility and physical life. Efficiency includes speed, fuel economy and the ability to load and discharge cargo quickly. Flexibility includes the ability to enter harbors, operate in extreme climates, utilize related docking facilities and pass-through canals and straits. The length of a vessel’s physical life is related to its original design and construction, its maintenance and the impact of the stress of operations. We face competition from companies with more modern vessels with more fuel-efficient designs than our vessels (“eco–vessels”). If new dry bulk vessels and tanker vessels are currently employed solely on timebuilt that are more efficient or more flexible or have longer physical lives than even the current eco-vessels, competition from the current eco-vessels and any more technologically advanced vessels could adversely affect the amount of charter hire payments we receive for our vessels once their charters expire and may, from time to time in the future, be employed under voyage charters. Our ability to renew charters or obtain new charters will depend on the prevailingresale value of our vessels could significantly decrease. We cannot assure you that, as our vessels age, market conditions atwill justify expenditures to maintain or update our vessels or enable us to operate our vessels profitably during the time.remainder of their useful lives. This could have a material adverse effect on our business, financial condition and operating results.
If we are not able to obtain new charters, either on time charter or in the spot market, in direct continuation with our existing charters or if new charters are entered into at rates substantially below the existing rates or on terms otherwise less favorable compared to the existing charter terms, our revenues and profitability could be adversely affected and we may have difficulty meeting our working capital and debt obligations or paying dividends in the future.
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We are subject to certain risks with respect to our counterparties on contracts, and failure of such counterparties to meet their obligations could cause us to suffer losses or negatively impact our results of operations and cash flows.
We have entered into, and may enter into in the future, various contracts, including charter agreements, pool agreements, management agreements, shipbuilding contracts and credit facilities. Such agreements subject us to counterparty risks. The ability of each of our counterparties to perform its obligations under a contract with us will depend on a number of factors that are beyond our control and may include, among other things, general economic conditions, the condition of the maritime and offshore industries, the overall financial condition of the counterparty, charter rates received for specific types of vessels, and various expenses. For example, the combination of a reduction of cash flow resulting from declinesa decline in world trade a reduction in borrowing bases under reserve-based credit facilities and the lack of availability of debt or equity financing may result in a significant reduction in the ability of our charterers to make charter payments to us. In addition, in depressed market conditions, our charterers and customers may no longer need a vessel that is then under charter or contract or may be able to obtain a comparable vessel at lower rates.rates and our pool operators may not be able to profitably employ our participating vessels. As a result, charterers and customers may seek to renegotiate the terms of their existing charter agreements or avoid their obligations under those contracts.contracts and pool operators may terminate the pool agreements or admit inability to comply with their obligations under those agreements. Should a counterparty fail to honor its obligations under agreements with us, we could sustain significant losses which could have a material adverse effect on our business, cash flows, financial condition, resultsand operating results.
We are dependent upon Castor Ships and Pavimar, which are related parties, and other third-party sub-managers for the management of operationsour fleet and cash flows.
Thebusiness, particularly for our tanker segments, and failure of our chartererssuch counterparties to meet their obligations under our charter agreement, on which we depend for our revenues, could cause us to suffer losses or otherwisenegatively impact our results of operations and cash flows.
The management of our business, including, but not limited, the commercial and technical management of our fleet as well as administrative, financial and other business functions, is carried out by Castor Ships S.A. (“Castor Ships”), which is a company controlled by our Chairman, Chief Executive Officer and Chief Financial Officer, Petros Panagiotidis, and Pavimar S.A. (“Pavimar”), which is a company controlled by Ismini Panagiotidis, the sister of our Chairman, Chief Executive Officer and Chief Financial Officer. We are reliant on Castor Ships and/or Pavimar continued and satisfactory provision of their services.
As of the date of this annual report, Pavimar has subcontracted, with our consent, the technical management for our nine tanker vessels and three of our dry bulk vessels to third-party management companies. Our subcontracting arrangements with these third-parties may expose us to risks such as low customer satisfaction with the service provided by these subcontractors, increased operating costs compared to those we would achieve for our vessels, and an inability to maintain our vessels according to our standards or our current or potential customers’ standards, such as the rigorous vetting requirements of some of the world’s most selective major international oil companies.
Moreover, we currently have subcontracted the commercial management for six of our tanker vessels to third-party managers. Our ability to enter into new charters and expand our customer relationships depends largely on our ability to leverage our relationship with our commercial managers and Pavimar and their reputations and relationships in the shipping industry. If our commercial managers and/or Pavimar suffer material damage to their reputations or relationships, it may also harm our ability to renew existing charters upon their expiration, obtain new charters or maintain satisfactory relationships with suppliers and other third parties. In addition, the inability of our commercial managers to fix our vessels at competitive charter rates either due to prevailing market conditions at the time or due to their inability to provide the requisite quality of services, could adversely affect our business.revenues and profitability and we may have difficulty meeting our working capital and debt obligations.
Our operational success and ability to execute our growth strategy will depend significantly upon the satisfactory and continued performance of these services by our managers and/or sub-managers, as well as their reputations. Any of the foregoing factors could have an adverse effect on our and their reputations and on our business, financial condition and operating results. Although we may have rights against our managers and/or sub-managers if they default on their obligations to us, our shareholders will share that recourse only indirectly to the extent that we recover funds.
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We expectperiodically employ vessels in the spot market and exposing us to risk of losses based on short-term decreases in shipping rates.
We periodically employ some of our vessels in the spot market, either in the trip charter market or in spot-market oriented pools. The spot charter market is highly competitive and rates within this market are highly volatile, fluctuating significantly based upon supply of and demand of vessels and cargoes. Conversely, longer-term charter contracts have pre-determined rates over more extended periods of time providing, a fixed source of revenue to us. The successful operation of our vessels in the competitive spot charter market depends upon, among other things, our commercial and pool managers obtaining profitable spot charters and minimizing, to the extent possible, time spent waiting for charters and time spent traveling unladen to pick up cargo. We cannot assure you that we will be successful in keeping our vessels fully employed in these short-term markets, or that future spot rates will be sufficient to enable such vessels to operate profitably. In the past, there have been periods when trip charter rates have declined below the operating cost of vessels. A significant decrease in spot market rates or our inability to fully employ our vessels under short-term, medium or long-term charter agreements as well as inby taking advantage of the spot voyage market. Themarket would result in a reduction of the revenues received from spot chartering and adversely affect operating results, including our profitability and cash flows, with the result that our ability to serve our working capital and willingness of eachdebt service needs could be impaired.

Additionally, if spot market rates or short-term time charter rates become significantly lower than the time charter equivalent rates that some of our counterparties to perform their obligations under a time charter, spot charter or other agreement with us, will depend on a number of factors thatcharterers are beyond our control and may include, among other things, general economic conditions, the condition of the dry bulk and tanker industries and the overall financial condition of the counterparties. In addition, in depressed market conditions, there have been reports of charterers renegotiating their charters or defaulting on their obligations under charters. Our customers may failobligated to pay us under our existing charters, the charterers may have incentive to default under that charter hire or attempt to renegotiate charter rates. Should a counterparty fail to honor its obligations under agreements with us, it may be difficult to secure substitute employment for such vessel, and any new charter arrangements we secure in the spot market or on time charters may be at lower rates.charter. If our charterers fail to meetpay their obligations, we might have to us or attempt to renegotiatere-charter our vessels at lower charter agreements, we could sustain significant lossesrates, which could have a material adverse effect on our business, financial condition, results of operations and cash flows, as well asaffect our ability to pay dividends, if any, in the future.comply with our loan covenants and operate our vessels profitably.

Our credit facilities contain, and we expect that any new or amended credit facility we may enter into will contain, restrictive covenants that limit,we may not be able to comply with due to economic, financial or operational reasons and may limit the future, our business and financing activities.
The operating and financial restrictions and covenants in our current credit agreements, with Alpha Bank S.A., Chailease International Financial Services Co. Ltd. and Hamburg Commercial AG, and any new or amended credit facility we may enter into in the future, could adversely affect our ability to finance future operations or capital needs or to engage, expand or pursue our business activities.
For example, our current facilities require the consent of our lenders to:to, among other things:
incur or guarantee additional indebtedness outside of our ordinary course of business;
charge, pledge or encumber our vessels;
change the flag, class, management or ownership of our vessels;
change the commercial and technical management of our vessels;
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declare or pay any dividends or other distributions at a time when the Company has an Eventevent of Defaultdefault or the payment of such distribution would cause an Eventevent of Default;default;
form or acquire any subsidiaries;
make any investments in any person, asset, firm, corporation, joint venture or other entity;
merge or consolidate with any other person; and
sell or change the beneficial ownership or control of our vessels.
Additionally, it is an event of default under one or more of our existing facilitiesvessels if among other things, (i) the registration of vessels under the laws and flag of the relevant flag state is cancelled or terminated without the prior written consent of the lender, (ii) there has been a change of control directly or indirectly in our subsidiaries or us,us; and
to enter into time charter contracts above a certain duration or (iii) there is a change in managementbareboat charters.
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Our facilities also require us to comply with certain financial covenants, relatedin each case subject to (i) maintaining a certain minimum level of free cash on a pledged deposit account and (ii) maintaining a certain security requirement ratio, which is the ratio of the aggregate market value of the mortgaged vessels plus the value of any additional security and value of the pledged deposit to the aggregate principal amounts due under the facilities.exceptions,  including:

(i)
maintaining a certain minimum level of cash on pledged deposit accounts with the borrowers;

(ii)
maintaining a certain minimum value ratio at the borrowers’ level, which is the ratio of the aggregate market value of the mortgaged vessels plus the value of any additional security and value of the pledged deposit and/or the value of dry dock reserve accounts to the aggregate principal amounts due under the facilities;

(iii)
maintaining a dry dock reserve at the borrowers’ level;

(iv)
not having a ratio of net debt to assets adjusted for the market value of the vessels above a certain level;

(v)
maintaining a certain level of minimum free cash at Castor Maritime; and

(vi)
maintaining a trailing 12 months EBITDA to net interest expense ratio at and above a certain level.
Our ability to comply with the covenants and restrictions contained in our current or future credit facilities may be affected by events beyond our control, including prevailing economic, financial and industry conditions, interest rate developments, changes in the funding costs of our banks and changes in vessel earnings and asset valuations. If market or other economic conditions deteriorate, our ability to comply with these covenants may be impaired. We may be obligated to prepay part of our outstanding debt in order to remain in compliance with the relevant covenants in our current or future credit facilities. If we are in breach of any of the restrictions, covenants, ratios or tests in our current or future credit facilities, or if we trigger a cross-default contained in our current or future credit facilities, a significant portion of our obligations may become immediately due and payable. We may not have, or be able to obtain, sufficient funds to make these accelerated payments. In addition, obligations under our current and future credit facilities are and are expected to be secured by our vessels, and if we are unable to repay debt under our current or future credit facilities, the lenders could seek to foreclose on those assets. Any of these factors could have a material adverse effect on our business, financial condition and operating results.
Furthermore, any contemplated vessel acquisitions will have to be at levels that do not impair the required ratios set out above. The global economic downturn that occurred within the past several years had an adverse effect on vessel values, which may occur again if an economic slowdown arises in the future. If the estimated asset values of the vessels in our Fleetfleet decrease, such decreases may limit the amounts we can draw down under our future credit facilities to purchase additional vessels, limit our ability to raise equity capital and our ability to expand our Fleet. In addition, we may be obligated to prepay part of our outstanding debt in order to remain in compliance with the relevant covenants in our current or future credit facilities.fleet. If funds under our current or future credit facilities become unavailable or we need to repay them as a result of a breach of our covenants or otherwise, we may not be able to perform our business strategy which could have a material adverse effect on our business, results of operations and financial condition and operating results.
Most of our abilityoutstanding debt is exposed to pay dividends.Interbank Offered Rate (“LIBOR”) Risk. We may be adversely affected by the transition from LIBOR as a reference rate and are exposed to volatility in LIBOR and the Secured Overnight Financing Rate, or SOFR. If volatility in LIBOR and/or SOFR occurs, the interest on our indebtedness could be higher than prevailing market interest rates and our profitability, earnings and cash flows may be materially and adversely affected.
We are exposed to volatilitythe risk of interest rate variations, principally in relation to the London Interbank Offered Rate orU.S. dollar LIBOR. Most of our outstanding indebtedness is exposed to LIBOR risk, including amounts borrowed under six of our credit facilities which bear interest at annual rates ranging from 3.10% to 4.50% over LIBOR. We have also entered into one credit facility which is based on adjusted SOFR, an adjusted new index that measures the cost of borrowing cash overnight, backed by U.S. Treasury securitiesand we may enter into derivative contracts, which can resultadditional SOFR-based loans in higherthe future.
On July 27, 2017, the United Kingdom’s Financial Conduct Authority (“FCA”) announced that it expected, by no later than market interest ratesthe end of 2021, to cease taking steps aimed at ensuring the continuing availability of LIBOR in its current form. On November 24, 2017, the FCA announced that the panel banks that submit information to ICE Benchmark Administration Limited (“IBA”), as administrator of LIBOR, had undertaken to continue to do so until the end of 2021. On November 30, 2020, the IBA announced that it would consult on ceasing to determine one-week and charges against our income. If volatility intwo-month U.S. dollar LIBOR occurs, it could affect our profitability, earnings and cash flow.
with effect from December 31, 2021, but ceasing to determine the remaining U.S. dollar LIBOR is the subject of recent national, international and other regulatory guidance and proposals for reform. tenors on June 30, 2023. These reforms and other pressures may cause LIBOR to be eliminated or to perform differently than in the past.past or to disappear entirely.
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In accordance with recommendations from the committee appointed by the U.S. Federal Reserve Board to manage the transition away from LIBOR, U.S. dollar LIBOR is expected to be replaced with SOFR. Given that SOFR is a secured rate backed by government securities, it will be a rate that does not take into account bank credit risk (as is the case with LIBOR). SOFR is therefore likely to be lower than LIBOR and is less likely to correlate with the funding costs of financial institutions. As a result, parties may seek to adjust the spreads relative to such reference rate in underlying contractual arrangements. Certain market constituencies have also criticized SOFR’s suitability as a LIBOR replacement, and the extent of SOFR-based instruments issued or trading in the market remains a fraction of LIBOR-based instruments. As a result, there remains uncertainty regarding the future utilization of LIBOR and the nature of any replacement rates. The consequences of these developments with respect to LIBOR cannot be entirely predicted but could include an increasemay result in financial market disruptions and may impact the costlevel of interest payments on the portion of our indebtedness that bears interest at variable rate indebtedness and obligations. rates. This may increase the amount of our interest payments under such debt.
The amount outstanding undermajority of our senior secured credit facilities has been, and amounts under additional credit facilities that we have entered into after December 31, 2020 including the $15.3 Million Term Loan Facility (as described in "Item“Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Our Borrowing Activities") orActivities” provide that interest may enter in the future will generally be unless a replacement rate is introduced, advanced at a floating rate based on LIBOR whichand for the use of an alternate rate to LIBOR in the event LIBOR is phased-out. We and the lenders under our LIBOR-based senior secured credit facilities may seek to amend such agreements to replace LIBOR with a different benchmark index that is expected to mirror developments in the rest of the debt markets at the time and make certain other conforming changes to the agreements. However, the new rate may not be as favorable as those in effect prior to any LIBOR phase-out. In some cases, our lenders have insisted on provisions that entitle the lenders, following consultation with the borrowers and in the absence of agreement, in their discretion, and under certain market disruption events, to replace published LIBOR as the base for the interest calculation with another benchmark or with their cost-of-funds rate. As a result, our lending costs under our LIBOR-based credit facilities could increase significantly.
LIBOR has historically been volatile, with the spread between LIBOR and the prime lending rate widening significantly at times. These conditions are the result of the disruptions in prior yearsthe international credit markets. SOFR or any other replacement reference rate may behave similarly. Because the interest rates borne by our variable interest-bearing outstanding indebtedness fluctuate with changes in LIBOR and canSOFR, if this volatility were to occur, it would affect the amount of interest payable on our debt.
 In order to manage our exposure to interest rate fluctuations, we may from time to time use interest rate derivatives to effectively fix some of our floating rate debt obligations. We currently do not have any derivative instruments in place. LIBOR and in turn, could have an adverse effect on our earnings and cash flow. In addition, in recent years, LIBOR has beenSOFR are currently at relatively low levels, andbut may rise in the future as the current low interest rate environment comes to an end. Our financial condition could be materially adversely affected at any time that we have not entered into interest rate hedging arrangements to hedge our exposure to the interest rates applicable to our credit facilities and any other financing arrangements we may enter into in the future. Moreover, we currently do not have any derivative instruments but even if we enter into interest rate swaps or other derivative instruments for purposes of managing our interest rate exposure, our hedging strategies may not be effective and we may incur substantial losses.
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LIBOR has historically been volatile, with the spread between LIBOR and the prime lending rate widening significantly at times. These conditions are the result of the disruptions in the international credit markets. Because the interest rates borne by our variable interest-bearing outstanding indebtedness fluctuate with changes in LIBOR, if this volatility were to occur, it would affect the amount of interest payable on our variable interest debt, which in turn, could have an adverse effect on our profitability, earnings and cash flow.
Furthermore, the calculation of interest in most financing agreements in our industry has been based on published LIBOR rates. Due in part to uncertainty relating to the LIBOR calculation process in recent years, it is planned that LIBOR will be phased out in the future. As a result, lenders have insisted on provisions that entitle the lenders, following consultation with the borrowers and in the absence of agreement, in their discretion, and under certain market disruption events, to replace published LIBOR as the base for the interest calculation with their cost-of-funds rate. As such, our lending costs could increase significantly, which would have an adverse effect on our profitability, earnings and cash flow.
In addition, the banks currently reporting information used to set LIBOR will likely stop such reporting after 2021, when their commitment to reporting information ends. However, on November 30, 2020 the administrator of LIBOR, ICE Benchmark Administration ("IBA"), announced that it would consult on ceasing to determine one-week and two-month U.S. dollar LIBOR with effect from December 31, 2021 deadline but ceasing to determine the remaining U.S. dollar LIBOR tenors on June 30, 2023. This announcement coincided with an announcement by the International Swaps and Derivatives Association ("ISDA") that the IBA announcement was not a triggering event which would set the spread to be used in its derivative contracts as part of the risk-free rate determination process. The Alternative Reference Rate Committee, a committee convened by the Federal Reserve that includes major market participants, has proposed an alternative rate to replace U.S. Dollar LIBOR: the Secured Overnight Financing Rate, or "SOFR". The impact of such a transition from LIBOR to SOFR could be significant for us.
In order to manage our exposure to interest rate fluctuations, we may from time to time use interest rate derivatives to effectively fix some of our floating rate debt obligations. No assurance can however be given thatConversely, the use of these derivative instruments, if any, may not effectively protect us from adverse interest rate movements. The use of interest rate derivatives may result in substantial losses and may affect our results through mark to market valuation of these derivatives. Also, adverse movements in interest rate derivatives may require us to post cash as collateral, which may impact our free cash position. Interest rate derivatives may also be impacted by the transition from LIBOR to SOFR or other alternative rates. Entering into swaps and derivatives transactions is inherently risky and presents various possibilities for incurring significant expenses. Such risk may
Any of the foregoing factors, including any combination of them, could have an adverse effect on our business, financial condition, cash flow and results of operations.operating results.
Our vessels operate under a mix of period time charters and trip time charters and any decrease in trip charter rates or indexes in the future may adversely affect our earnings.
Our vessels have historically operated mostly under period time charters but may, from period to period, be placed on the trip time charter market, exposing us to fluctuations in trip market charter rates. Further, we may employ any additional vessels that we acquire in the trip time charter market.
Although the number of vessels in our Fleet that participate in the trip time charter market vary from time to time, we anticipate that some portion of our Fleet will participate in this market. As a result, our financial performance may be significantly affected by conditions in the trip time charter market and only our vessels that may operate under fixed-rate period time charters may, during the period such vessels operate under such period time charters, provide a fixed source of revenue to us.
Historically, the cargo markets have been volatile as a result of the many conditions and factors that can affect the price, supply of and demand for dry bulk and tanker vessel capacity. The weak global economic trends may further reduce demand for transportation of dry bulk cargoes and for energy consumption and the demand for the carriage of oil products in our tanker vessels over longer distances, which may materially affect our revenues, profitability and cash flows. The trip charter market may fluctuate significantly based upon supply of and demand of vessels and cargoes. The successful operation of our vessels in the competitive trip charter market depends upon, among other things, obtaining profitable trip charters and minimizing, to the extent possible, time spent waiting for charters and time spent traveling unladen to pick up cargo. The trip charter market is very volatile, and, in the past, there have been periods when trip charter rates have declined below the operating cost of vessels. If future trip charter rates decline, then we may be unable to operate our vessels which may trade in the trip market profitably, or meet our debt and other working capital obligations. Furthermore, as charter rates for trip charters are fixed for a single voyage, which may last up to several weeks, during periods in which trip charter rates are rising, we will generally experience delays in realizing the benefits from such increases.
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We may not be able to obtain debt or equity financing on acceptable terms which may negatively impact our planned growth. In particular, in the past we have relied on financial support from our Chairman, Chief Executive Officer and Chief Financial Officer, Petros Panagiotidis, which may not be available in the future.
As a result of concerns about the stability of financial markets generally and the solvency of counterparties, specifically,among other factors, the ability to obtain money from the credit markets has become more difficult as many lenders have increased interest rates, enacted tighter lending standards, refused to refinance existing debt at all or on terms similar to current debt and reduced, and in some cases ceased, to provide funding to borrowers. Due to these factors, we cannot be certain that financing or refinancing will be available if needed and to the extent required, on acceptable terms. If financing is not available when needed, or is available only on unfavorable terms, we may be unable to enhance our existing business, complete additional vessel acquisitions or otherwise take advantage of business opportunities as they arise.
The Company has relied on financial support from Mr. Panagiotidis through related party loans, which may not be available to
In the Company in the future.
From time to time,past, we have obtained loans from our Chairman, Chief Executive Officer and Chief Financial Officer, Petros Panagiotidis to meet vessel purchase obligations of the Company. These loans may not be available to the Company in the future.future or may only be available on more unfavorable terms. Even if we are able to borrow money from such parties,Mr. Panagiotidis, such borrowing could create a conflict of interest of managementmanagement. See also “—Our Chairman, Chief Executive Officer and Chief Financial Officer, who may be deemed to the extent they also act as lenders to the Company.own, directly or indirectly, 100% of our Series B Preferred Shares, has control over us.”Any of these factors could have a material adverse effect on our business, financial condition and operating results.
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We are a holding company, and we depend on the ability of our subsidiaries to distribute funds to us in order to satisfy our financial and other obligations.
We are a holding company and have no significant assets other than the equity interests in our subsidiaries. Our subsidiaries own all of our existing vessels, and subsidiaries we form in the futureor acquire will own any other vessels we may acquire in the future. All payments under our charters will beare made to our subsidiaries. As a result, our ability to meet our financial and other obligations, and to pay dividends in the future, as and if declared, will depend on the performance of our subsidiaries and their ability to distribute funds to us. The ability of a subsidiary to make these distributions could be affected by a claim or other action by a third party, including a creditor, by the terms of our loan agreements, any financing agreement we may enter into in the future,arrangements, or by Marshall Islandsthe applicable law which regulatesregulating the payment of dividends byin the jurisdictions in which our companies.subsidiaries are organized.
The
In particular, the applicable loan agreements entered into by our subsidiaries, prohibitsprohibit such subsidiaries from paying any dividends to us if we or such subsidiary breach a covenant in oura loan agreementsagreement or any financing agreement we may enter into. See “—Our credit facilities contain, and we expect that any new or amended credit facility we enter into in the future.will contain, restrictive covenants that we may not be able to comply with due to economic, financial or operational reasons and may limit our business and financing activities.” If we are unable to obtain funds from our subsidiaries, we will not be able to fundmeet our liquidity needs or pay dividends in the future unless we obtain funds from other sources, which we may not be able to do.
We cannot assure you that our
Our Board willmay never declare dividends.
Our Board will continue to assess our dividend policy and may in the future determine to pay dividends.policy. The declaration and payment of dividends, if any, will always be subject to the discretion of our Board, restrictions contained in our debt agreements or debt agreements that we may enter into in the future and the requirements of Marshall Islands law. TheIf the Board determines to declare dividends, the timing and amount of any dividends declared will depend on, among other things, our earnings, financial condition and cash requirements and availability, our ability to obtain debt and equity financing on acceptable terms as contemplated by our growth strategy, our compliance with the terms of our outstanding indebtedness and the ability of our subsidiaries to distribute funds to us. The dry bulk and tanker industries are highly volatile, and we cannot predict with certainty the amount of cash, if any, that will be available for distribution as dividends in any period. Also, there may be a high degree of variability from period to period in the amount of cash that is available for the payment of dividends.
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We may incur expenses or liabilities or be subject to other circumstances in the future that reduce or eliminate the amount of cash that we have available for distribution as dividends, including as a result of the risks described herein. Our growth strategy contemplates that we will finance our acquisitions of additional vessels using cash from operations, through debt financings and/or from the net proceeds of future equity issuances on terms acceptable to us. If financing is not available to us on acceptable terms or at all, our Board may determine to finance or refinance acquisitions with cash from operations, which would reduce the amount of any cash available for the payment of dividends, if any.
The Republic of Marshall Islands laws generally prohibits the payment of dividends other than from surplus (retained earnings and the excess of consideration received for the sale of shares above the par value of the shares) or while a company is insolvent or would be rendered insolvent by the payment of such a dividend. We may not have sufficient surplus in the future to pay dividends and our subsidiaries may not have sufficient funds or surplus to make distributions to us. We can givecurrently pay no assurance that dividends will be paid at all.and we may never pay dividends.
We are dependent upon Castor Ships and Pavimar, which are related parties, for the management of our Fleet and business.
The management of our business, including, but not limited, the commercial and technical management of our Fleet as well as administrative, financial and other business functions, is carried out by Castor Ships S.A. ("Castor Ships"), which is a company controlled by our Chairman, Chief Executive Officer and Chief Financial Officer, Petros Panagiotidis, and Pavimar S.A. ("Pavimar"), which is a company controlled by Ismini Panagiotidis, the sister of our Chairman, Chief Executive Officer and Chief Financial Officer. The loss of Castor Ships' and/or Pavimar's services or their failure to perform their obligations to usWorldwide inflationary pressures could materially and adversely affectnegatively impact our results of operations and financial condition.cash flows.

It has been recently observed that worldwide economies have experienced inflationary pressures, with price increases seen across many sectors globally. Indicatively, the U.S. consumer price index, an inflation gauge that measures costs across dozens of items, rose 7% in December 2021 compared to the prior year, the fastest pace since June 1982, and further rose to 7.9% in February 2022. Certain goods, including fuel, oil and oil products, as well as certain grains such as wheat and corn, have experienced disproportionate price increases due to trading pattern disruptions attributable to the armed conflict in Ukraine. It remains to be seen whether inflationary pressures will continue, and to what degree, as central banks begin to respond to price increases. In addition, our ability to enter into new chartersthe event that inflation becomes a significant factor in the global economy generally and expand our customer relationships depends largely on our ability to leverage our relationship with Castor Ships and Pavimar and their reputations and relationships in the shipping industry. If Castor Ships or Pavimar suffer material damage to their reputations or relationships, it may harm our ability to renew existing charters upon their expiration, obtain new charters or maintain satisfactory relationships with suppliers and other third parties.
Our business will be harmed if Castor Ships or Pavimar fail to perform these services satisfactorily, if they cancel their agreements with us or if they stop providing these services to us. Our operational success and ability to execute our growth strategy will depend significantly upon the satisfactory performance of these services by Castor Ships and Pavimar and their reputations.
We may have difficulty managing our planned growth properly.
We are a recent company formed for the purpose of acquiring, owning, chartering and operating oceangoing cargo vessels. One of our principal strategies is to continue to grow by expanding our operations and adding to our Fleet. As our business grows, we intend to acquire additional dry bulk, tanker and other vessels and expand our activities. Our future growth will primarily depend upon a number of factors, some of which may not be within our control. These factors include our ability to:
identify suitable vessels, including newbuilding slots at reputable shipyards and/or shipping companies for acquisitions at attractive prices;
obtain required financing for our existing and new operations;
integrate any acquired vessels, assets or businesses successfully with our existing operations, including obtaining any approvals and qualifications necessary to operate vessels that we acquire;
hire, train and retain qualified personnel and crew to manage and operate our growing business and Fleet;
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enhance our customer base; and
improve our operating, financial and accounting systems and controls.
In addition, competition from other companies, many of which have significantly greater financial resources than we do, may reduce our acquisition opportunities or cause us to pay higher prices. Our failure to effectively identify, acquire, develop and integrate any vessels could adversely affect our business, financial condition and results of operations. The number of employees that perform services for us and our current operating and financial systems may not be adequate as we implement our plan to expand the size of our Fleet, and we may not be able to effectively hireindustry more employees or adequately improve those systems. Finally, acquisitions may require additional equity issuances, which may dilute our common shareholders if issued at lower prices than the price they acquired their shares, or debt issuances (with amortization payments), both of which could lower our available cash. If any such events occur, our financial condition may be adversely affected.
Growing any business by acquisition(s) presents numerous risks such as undisclosed liabilities and obligations, difficulty in obtaining additional qualified personnel and managing relationships with customers and suppliers and integrating newly acquired operations into existing infrastructures. The expansion of our Fleet may impose significant additional responsibilities on our management and the management and staff of our commercial and technical managers, and may necessitate that we, and they, increase the number of personnel. We cannot give any assurance that we will be successful in executing our growth plans or that we will not incur significant expenses and losses in connection with our future growth.
As we expand our business, we may be unable to improve our operating and financial systems and to recruit suitable employees and crew for our vessels.
Our or our managers' current operating and financial systems may not be adequate as we continue to implement our plan to expand the size of our Fleet and our attempts to improve those systems may be ineffective. In addition, if we further expand our Fleet, we will need to recruit suitable additional seafarers and shore-side administrative and management personnel. We cannot guarantee that we will be able to hire suitable employees as we expand our Fleet. If we encounter business or financial difficulties, we may not be able to adequately staff our vessels or our shore-side personnel. If we are unable to grow our financial and operating systems or to recruit suitable employees as we expand our Fleet, our financial performance may be adversely affected and, among other things, the amount of cash available for distribution as dividends to our shareholders may be reduced.
Exposure to currency exchange rate fluctuations willspecifically, inflationary pressures would result in fluctuations in our cash flowsincreased operating, voyage and operating results.
We may incur some of our operating expenses and general and administrative expenses in currencies other than the U.S. dollar. This difference could lead to fluctuations in vessel operating expenses, which would affect our financial results. Expenses incurred in foreign currencies increase when the value of the U.S. dollar falls, which would reduce our profitability. Our operating results could suffer as a result.
We operate secondhand vessels, and, as a result, we may incur increased operating costs which could adversely affectin turn negatively impact our earnings. Furthermore, asoperating results, and in particular, our vessels age, the risks associated with our vessels could adversely affect our ability to obtain profitable charters.cash flows.
While we have inspected our vessels and we intend to inspect any potential future vessel acquisition, this does not provide us with the same knowledge about its condition that we would have had if the vessel had been built for and operated exclusively by us. Generally, purchasers of secondhand vessels do not receive the benefit of warranties from the builders for the secondhand vessels that they acquire.
In general, the cost of maintaining a vessel in good operating condition increases with the age of the vessel. We currently own a fleet with an average age of 14.3 years and, upon completion of our recently announced acquisitions, we will own a fleet with an average age of 13.5 years. As our vessels age typically, it will become less fuel-efficient and more costly to maintain than more recently constructed vessels due to improvements in engine technology. Cargo insurance rates increase with the age of a vessel, making older vessels less desirable to charterers. Governmental regulations and safety or other equipment standards related to the age of vessels may also require expenditures for alterations or the addition of new equipment, to our vessels and may restrict the type of activities in which our vessels may engage. We cannot assure you that, as our vessels age, market conditions will justify those expenditures or enable us to operate our vessels profitably during the remainder of its useful life.
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Technological innovation and quality and efficiency requirements from our customers could reduce our charter hire income and the valueTable of our vessels.Contents
Our customers have a high and increasing focus on quality and compliance standards with their suppliers across the entire supply chain, including the shipping and transportation segment. Our continued compliance with these standards and quality requirements is vital for our operations. The charter hire rates and the value and operational life of a vessel are determined by a number of factors including the vessel's efficiency, operational flexibility and physical life. Efficiency includes speed, fuel economy and the ability to load and discharge cargo quickly. Flexibility includes the ability to enter harbors, operate in extreme climates, utilize related docking facilities and pass through canals and straits. The length of a vessel's physical life is related to its original design and construction, its maintenance and the impact of the stress of operations. We face competition from companies with more modern vessels with more fuel efficient designs than our vessels, or eco vessels, and if new dry bulk vessels and tanker vessels are built that are more efficient or more flexible or have longer physical lives than the current eco vessels, competition from the current eco vessels and any more technologically advanced vessels could adversely affect the amount of charter hire payments we receive for our vessels once their initial charters expire and the resale value of our vessels could significantly decrease. This could have an adverse effect on our results of operations, cash flows, financial condition and ability to pay dividends.
Increasing scrutiny and changing expectations from investors, lenders and other market participants with respect to our Environmental, Social and Governance ("ESG"(“ESG”) policies may impose additional costs on us or expose us to additional risks.
Companies across all industries are facing increasing scrutiny relating to their ESG practices and policies. Investor advocacy groups, certain institutional investors, investment funds, lenders and other market participants are increasingly focused on ESG practices and in recent years have placed increasing importance on the implications and social cost of their investments. The increased focus and activism related to ESG and similar matters may hinder access to capital, as investors and lenders may decide to reallocate capital or to not commit capital as a result of their assessment of a company'scompany’s ESG practices. Companies which do not adapt to or comply with investor, lender or other industry shareholder expectations and standards, which are evolving, or which are perceived to have not responded appropriately to the growing concern for ESG issues, regardless of whether there is a legal requirement to do so, may suffer from reputational damage and the business, financial condition, and/or stock price of such a company could be materially and adversely affected.
We may face increasing pressures from investors, lenders and other market participants, who are increasingly focused on climate change, to prioritize sustainable energy practices, reduce our carbon footprint and promote sustainability. As a result, we may be required to implement more stringent ESG procedures or standards so that our existing and future investors and lenders remain invested in us and make further investments in us, especially given the highly focused and specific trade of dry bulk, crude oil and petroleum products transportation in which we are engaged. If we do not meet these standards, our business and/or our ability to access capital could be harmed.
These limitations in both the debt and equity capital markets may affect our ability to grow as our plans for growth may include accessing the equity and debt capital markets. If those markets are unavailable, or if we are unable to access alternative means of financing on acceptable terms, or at all, we may be unable to implement our business strategy, which would have a material adverse effect on our financial condition and results of operations andcould impair our ability to service our indebtedness. Further, it is likely that we will incur additional costs and require additional resources to monitor, report, and comply with and implement wide ranging ESG requirements. The occurrence of anyAny of the foregoing factors could have a material adverse effect on our business, financial condition and financial condition.operating results.
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We are a relatively new company, and our anti-fraud and corporate governance procedures might not be as advanced as those implemented by our listed peer competitors having a longer presence in the shipping industry.


We are a listed company with a relatively limited operating history. As a publicly traded company, the SEC, Nasdaq Capital Market, and other regulatory bodies subject us to increased scrutiny on the way we manage and operate our business by urging us or mandating us to a series of actions that have nowadays become an area of focus among policymakers and investors. Listed companies are occasionally encouraged to follow best practices, while often must comply with these rules and/or practices addressing a variety of corporate governance and anti-fraud matters such as director independence, board committees, corporate transparency, ethical behavior, prevention and controls of corruption and fraud etc. While we believe we follow all requirements that regulatory bodies may from time to time impose on us, our internal processes and procedures might not be as advanced or mature as those implemented by other listed shipping companies with a longer experience and presence in the US capital markets, with could be an area of concern to our investors and expose us to greater operational risks.
We may be subject to litigation that, if not resolved in our favor and not sufficiently insured against, could have a material adverse effect on us.
We may, be, from time to time, be involved in various litigation matters. These matters may include, among other things, contract disputes, personal injury claims, environmental claims or proceedings, asbestos and other toxic tort claims, employment matters, governmental claims for taxes or duties, and other litigation that arises in the ordinary course of our business. Although we intend to defend these matters vigorously, weWe cannot predict with certainty the outcome or effect of any claim or other litigation matter, and the ultimate outcome of any litigation or the potential costs to resolve themit may have a material adverse effect on us.our business. Insurance may not be applicable or sufficient in all cases and/or insurers may not remain solvent, which maycould have a material adverse effect on our financial condition.
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A change in tax laws, treaties or regulations, or their interpretation, of any country in which we operate could result in a higher tax rate on our worldwide earnings, which could result in a significant negative impact on our earnings and cash flows from operations.
We conduct our operations through subsidiaries which can trade worldwide. Tax laws and regulations are highly complex and subject to interpretation. Consequently, we are subject to changing tax laws, treaties and regulations in and between countries in which we operate. Our income tax expense, if any, is based upon our interpretation of tax laws in effect in various countries at the time that the expense was incurred. A change in these tax laws, treaties or regulations, or in the interpretation thereof, could result in a materially higher tax expense or a higher effective tax rate on our worldwide earnings, and such change could be significant to our financial results. If any tax authority successfully challenges our operational structure, or the taxable presence of our operating subsidiaries in certain countries, or if the terms of certain income tax treaties are interpreted in a manner that is adverse to our structure, or if we lose a material tax dispute in any country, our effective tax rate on our worldwide earnings could increase substantially, andsubstantially. An increase in our taxes could have a material adverse effect on our earnings and cash flows from these operations could be materially adversely affected.operations.
Our subsidiaries may be subject to taxation in the jurisdictions in which its activities are conducted. The amount of any such taxation may be material and would reduce the amounts available for distribution to shareholders.us.
Investors are encouraged to consult their own tax advisors concerning the overall tax consequences of the ownership of the common shares arising in an investor'sinvestor’s particular situation under U.S. federal, state, local or foreign law.
We are dependent on our management and their ability to hire and retain key personnel, in particular our Chairman, Chief Executive Officer and Chief Financial Officer, Petros Panagiotidis.
Our success will depend upon our and our management'smanagement’s ability to hire and retain key members of our management team, including Petros Panagiotidis. The loss of Mr. Panagiotidis could adversely affect our business prospects and financial condition.
Difficulty in hiring and retaining personnel could adversely affect our results of operations. We do not maintain "key man"“key man” life insurance on any of our officers.
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Risks Relating To Our Common Shares
Our share price has recently been highly volatile and may continue to be volatile in the future, and as a result, investors in our common shares could incur substantial losses.
Our stock price has recently been volatile and may continue be volatile in the future. For example, the reported closing sale price of our common shares on the Nasdaq Capital Market was $0.12 per share on November 2, 2020 and $1.73 per share on February 11, 2021. In addition, on January 28, 2021, the intra-day sale price of our common shares reported on the Nasdaq Capital Market fluctuated between a low of $0.50 per share and a high of $0.90 per share.
The stock market in general, and the market for shipping companies in particular, have experienced extreme volatility that has often been unrelated or disproportionate to the operating performance of particular companies. In addition, the ongoing COVID-19 pandemic has caused broad stock market and industry fluctuations. Further, we believe that we have a large number of retail investors holding our common shares, which could increase volatility in the price of our common shares. As a result of this volatility, investors may experience rapid and substantial losses on their investment in our common shares. shares that are unrelated to our operating performance. Our stock price has recently been volatile and may continue be volatile, which may cause our common shares to trade above or below what we believe to be their fundamental value. During 2021, the market price of our common shares on the Nasdaq Capital Market has fluctuated from an intra-day low of $1.36 per share on December 30, 2021 to an intra-day high of $19.50 per share on February 11, 2021. On December 31, 2021, the closing price of our common shares was $1.42 per share. Significant historical fluctuations in the market price of our common shares have been accompanied by reports of strong and atypical retail investor interest, including on social media and online forums.
The market volatility and trading patterns we have experienced may create several risks for investors, including but not limited to the following:
the market price forof our common shares may experience rapid and substantial increases or decreases unrelated to our operating performance or prospects, or macro or industry fundamentals;
to the extent volatility in our common shares is caused by a “short squeeze” in which coordinated trading activity causes a spike in the market price of our common shares as traders with a short position make market purchases to avoid or to mitigate potential losses, investors may purchase at inflated prices unrelated to our financial performance or prospects, and may thereafter suffer substantial losses as prices decline once the level of short-covering purchases has abated;
if the market price of our common shares declines, you may be influencedunable to resell your shares at or above the price at which you acquired them. We cannot assure you that the equity issuance of our common shares will not fluctuate, increase or decline significantly in the future, in which case you could incur substantial losses.
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We may continue to incur rapid and substantial increases or decreases in our stock price in the foreseeable future that may not coincide in timing with the disclosure of news or developments by or affecting us. Accordingly, the market price of our common shares may decline or fluctuate rapidly, regardless of any developments in our business. Overall, there are various factors, many factors, includingof which are beyond our control, that could negatively affect the following:market price of our common shares or result in fluctuations in the price or trading volume of our common shares, which include but are not limited to:
investor reaction to our business strategy;
the sentiment of the significant number of retail investors (including aswhom we believe to hold our common shares, in part due to direct access by retail investors to broadly available trading platforms, and whose investment thesis may be influenced by views expressed on financial trading and other social media sites and online forums), the direct access by retail investors to broadly available trading platforms, forums;
the amount and status of short interest in our common shares, access to margin debt, trading in options and other derivatives on our common shares and any related hedging and other trading factors;
our continued compliance with the listing standards of the Nasdaq Capital Market;
regulatory or legal developments in the United States and other countries, especially changes in laws or regulations applicable to our industry;
variations in our financial results or those of companies that are perceived to be similar to us;
our ability or inability to raise additional capital and the terms on which we raise it;
our dividend strategy;
our continued compliance with our debt covenants;
variations in the value of our fleet;
declines in the market prices of stocks generally;
trading volume of our common shares;
sales of our common shares by us or our shareholders;
speculation in the press or investment community about our Company or industry;
general economic, industry and market conditions; and
other events or factors, including those resulting from such events, or the prospect of such events, including war, terrorism and other international conflicts, public health issues including health epidemics or pandemics, such asincluding the ongoing COVID-19 pandemic, and natural disasters such as fire, hurricanes, earthquakes, tornados or other adverse weather and climate conditions, whether occurring in the United States or elsewhere, could disrupt our operations or result in political or economic instability.
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These factors, many of which are outside of our control, may negatively impact the market price of our common shares, regardless of our operating performance. For example, recent increases are significantly inconsistent with any improvements in actual or expected business prospects, operating performance, financial condition or other traditional measures of value, including our loss per share of $0.03 for the year ended December 31, 2020. Since the price of our common shares has recently been volatile and may continue to be volatile in the future, investors in our common shares could incur substantial losses.
Further, investors may purchase our common shares to hedge existing exposure or to speculate on the price of our common shares. Speculation on the price of our common shares may involve long and short exposures. To the extent an aggregate short exposure in our common shares becomes significant, investors with short exposure may have to pay a premium to purchase shares for delivery to share lenders at times if and when the price of our common shares increases significantly, particularly over a short period of time. Those purchases may in turn, dramatically increase the price of our common shares. This is often referred to as a "short squeeze". A short squeeze could lead to volatile price movements in our common shares that are not directly correlated to our business prospects, operating performance, financial condition or other traditional measures of value for the Company or our common shares.
In addition, some companies that have experienced volatility in the market price of their common shares have been subject to securities class-action litigation. If instituted against us, such litigation could result in substantial costs and diversion of management'smanagement’s attention and resources, which could materially and adversely affect our business, financial condition, operating results of operations and growth prospects. There can be no guarantee that the price of our common shares will remain at its current level or that future sales of our common shares will not be at prices lower than those sold to investors.
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Nasdaq may delist our common shares from its exchange which could limit your ability to make transactions in our securities and subject us to additional trading restrictions.
We
On April 14, 2020, we received written notification from Nasdaq dated April 14, 2020, indicating that because the closing bid price of the Company'sCompany’s common shares for 30 consecutive business days, from February 27, 2020 to April 13, 2020, was below the minimum $1.00 per share bid price requirement for continued listing on the Nasdaq Capital Market, the Company iswas not in compliance with the minimum bid price requirement of Nasdaq Listing Rule 5550(a)(2). The Company was also informed by Nasdaq that due to the COVID-19 crisis, temporary relief has been granted related to the minimum bid price requirement and the Company's compliance period will be suspended until June 30, 2020. Pursuant to the Nasdaq Listing Rule 5810(c)(3)(A), the applicable grace period to regain compliance is 180 days, or December 28, 2020, which included the temporary COVID-19 relief period.
On December 30, 2020,Following certain extension periods obtained, we announced that we received a notification letter from Nasdaq granting us an additional 180-day extension, orhad until June 28, 2021, to regain compliance with the minimum bid price requirement. We can cure this deficiency if the closing bid price of our common shares is $1.00 per share or higher for the requisite amount of time during the Second Compliance Period. Nasdaq may exercise its discretion to extend such requisite amount of time to better evaluate the registrant's ability to sustain long-term compliance with the minimum bid price requirement. We are evaluating all our optionsOn May 28, 2021, we effected a one-for-ten reverse stock split in order to regain compliance with the minimum bid price requirement, withinand, as a result, we regained compliance on June 14, 2021.
During the Second Compliance Period, includingmonth of January 2022, our closing bid price ranged between $1.08 and $1.53 per share. If a reverse stock split. During this time, our common shares will continue to be listed and traded on the Nasdaq Capital Market.
 If we are unable to regain compliance withbreach of the minimum bid price requirement within the Second Compliance Period,of Nasdaq were to occur again, we might be unable to regain compliance, which, in turn could lead to a suspension or delisting of our common shares may be suspended or delisted at the discretion of Nasdaq.shares. If a suspension or delisting of our common shares were to occur, there would be significantly less liquidity in the suspended or delisted common shares. In addition, our ability to raise additional capital through equity or debt financing would be greatly impaired. There can be no assurance that we will regain compliance withA suspension or delisting may also breach the minimum bid price requirementterms of certain of our material contracts, such as our at-the-market program Equity Distribution Agreement. Please see “Item 5. Operating and if we regain compliance, thereFinancial Review and Prospects—B. Equity Transactions” for further details on this program. There can be no assurance that we will maintain compliance with the minimum bid price requirements of Nasdaq in the future.
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Recent share issuances and the issuancefuture issuances of additional shares, inor the futurepotential for such issuances, may impact the price of our common shares and could impair our ability to regain compliance with Nasdaq's minimum bid price requirement.raise capital through subsequent equity offerings. Shareholders may experience significant dilution as a result of any such issuances.
We have already issued and sold large quantities of our common shares pursuant to previous public and private offerings of our equity and equity-linked securities. The Company had 707,157,93694,610,088 issued and outstanding common shares as of March 26,December 31, 2021. Upon the exercise of our outstanding warrants, the Company may issue up to an additional 1,394,94019,360,978 common shares. Additionally, the Company has an authorized share capital of 1,950,000,000 common shares that it may issue without further shareholder approval. Our growth strategy may require the issuance of a substantial amount of additional shares. We cannot assure you at what price the offering of our common shares in the future, if any, will be made but they may be offered and sold at a price significantly below the current trading price of our common shares or the acquisition price of common shares by shareholders and may be at a discount to the trading price of our common shares at the time of such sale. The issuance and sale of any securities in the future may be dilutive to our existing shareholders and may cause the price of our common shares to decline. The issuance of additional shares by the Company that has the effect of reducing the price of the trading price of the common shares may also prevent the Company from being able to regain compliance with the minimum bid price requirement of Nasdaq Listing Rule 5550(a)(2) prior to June 28, 2021, which may result in our common shares being suspended or delisted from the Nasdaq Capital Market. If a suspension or delisting of our common shares were to occur, there would be significantly less liquidity in the suspended or delisted common shares. In addition, our ability to raise additional capital through equity or debt financing would be greatly impaired.
We have a continuing ATM program in effect, under which we may sell up to $10.0 million of our common shares.
Subject to certain limitations in the Equity Distribution Agreement (as defined in "Item 5. Operating and Financial Review and Prospects—A. Liquidity and Capital Resources—Equity Issuances") and compliance with applicable law, we have the discretion to deliver placement notices to Maxim Group LLC, or Maxim, as our exclusive sales agent at any time throughout the term of the Equity Distribution Agreement, which started on June 28, 2019 and may be terminated by either party at any time. The number of shares that are sold by Maxim after delivering a placement notice will fluctuate based on the market price of the common shares during the sales period and limits we set with Maxim. Although we are initially eligible to sell common shares with an initial aggregate sales price of up to $10.0 million, should we be eligible and desire to offer additional common shares pursuant to the Equity Distribution Agreement with Maxim, we will file an additional prospectus supplement to register such additional common shares and the related preferred shares purchase rights. Therefore, investors will have no advance insight into the number of shares we are actually offering under the Equity Distribution Agreement. As of the date of this annual report, we have sold 618,112 common shares having raised approximate gross proceeds of approximately $2.6 million pursuant to the Equity Distribution Agreement.
We issued 918,112, 127,894,264 and 575,945,560 common shares during 2019, 2020 and 2021, respectively, through various transactions. Shareholders may experience significant dilution as a result of our offerings.
We have already issued and sold large quantities of our common shares pursuant to previous public and private offerings of our equity and equity-linked securities. We also have 480,000 Series A Preferred Shares outstanding and 12,000 Series B Preferred Shares outstanding. In addition, in the future we may file a replacement shelf registration statement covering the sale of some or all of our authorized common shares and other securities. We have additional outstanding warrants that may obligate us to issue up to an additional 1,394,940 common shares, in aggregate, upon the exercise of these warrants in full.
Purchasers of the common shares we sell, as well as our existing shareholders, will experience significant dilution if we sell shares at prices significantly below the price at which they invested.
 In addition, we may issue additional common shares or other equity securities of equal or senior rank in the future in connection with, among other things, debt prepayments, future vessel acquisitions, redemptions of our Series A Preferred Shares, without shareholder approval, in a number of circumstances. Our existing shareholders may experience significant dilution if we issue shares in the future at prices below the price at which previous shareholders invested.
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Our issuance of additional common shares or other equity securities of equal or senior rank would have the following effects:
our existing shareholders' proportionate ownership interest in us will decrease;
the per share amount of cash available for dividends on our common shares (as and if declared) could decrease;
the relative voting strength of each previously outstanding common share could be diminished; and
the market price of our common shares could decline.
Future issuances or sales, or the potential for future issuances or sales, of our common shares may cause the trading price of our securities to decline and could impair our ability to raise capital through subsequent equity offerings.
We have issued a significant number of our common shares and we may do so in the future. Shares to be issued in future equity offerings could cause the market price of our common shares to decline, and could have an adverse effect on our earnings per share. In addition, future sales of our common shares or other securities in the public markets, or the perception that these sales may occur, could cause the market price of our common shares to decline, and could materially impair our ability to raise capital through the sale of additional securities.
The market price of our common shares could decline due to sales, or the announcements of proposed sales, of a large number of common shares in the market, including sales of common shares by our large shareholders, or the perception that these sales could occur. These sales or the perception that these sales could occur could also depress the market price of our common shares and impair our ability to raise capital through the sale of additional equity securities or make it more difficult or impossible for us to sell equity securities in the future at a time and price that we deem appropriate. We cannot predict the effect that future sales of common shares or other equity-related securities would have on the market price of our common shares.
Our Articles of Incorporation authorizes our Board to, among other things, issue additional shares of common or preferred shares or securities convertible or exchangeable into equity securities, without shareholder approval. We may issue such additional equity or convertible securities to raise additional capital. The issuance of any additional shares of common or preferred shares or convertible securities could be substantially dilutive to our shareholders. Moreover, toTo the extent that we issue restricted stock units, stock appreciation rights, options or warrants to purchase our common shares in the future and those stock appreciation rights, options or warrants are exercised or as the restricted stock units vest, our shareholders may experience further dilution. Holders of shares of our common shares have no preemptive rights that entitle such holders to purchase their pro rata share of any offering of shares of any class or series and, therefore, such sales or offerings could result in increased dilution to our shareholders.
Our issuance of additional common shares or other equity securities of equal or senior rank, or the perception that such issuances may occur, could have the following effects:
our existing shareholders’ proportionate ownership interest in us will decrease;
the earnings per share and the per share amount of cash available for dividends on our common shares (as and if declared) could decrease;
the relative voting strength of each previously outstanding common share could be diminished;
the market price of our common shares could decline; and
our ability to raise capital through the sale of additional securities at a time and price that we deem appropriate, could be impaired.
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The market price of our common shares could also decline due to sales, or the announcements of proposed sales, of a large number of common shares by our large shareholders, or the perception that these sales could occur.
We are incorporated in the Marshall Islands, which does not have a well-developed body of corporate and case law.
We are organized in the Republic of the Marshall Islands, which does not have a well-developed body of corporate or case law, and as a result, shareholders may have fewer rights and protections under Marshall Islands law than under a typical jurisdiction in the United States. Our corporate affairs are governed by our Articles of Incorporation and Bylaws and by the Marshall Islands Business Corporations Act or the BCA.(the “BCA”). The provisions of the BCA resemble provisions of the corporation laws of a number of states in the United States. However, there have been few judicial cases in the Marshall Islands interpreting the BCA. The rights and fiduciary responsibilities of directors under the laws of the Marshall Islands are not as clearly established as the rights and fiduciary responsibilities of directors under statutes or judicial precedent in existence in the United States. The rights of shareholders of companies incorporated in the Marshall Islands may differ from the rights of shareholders of companies incorporated in the United States. While the BCA provides that it is to be interpreted according to the laws of the State of Delaware and other states with substantially similar legislative provisions, there have been few, if any, court cases interpreting the BCA in the Marshall Islands and we can'tcannot predict whether Marshall Islands courts would reach the same conclusions as U.S. courts. Thus, you may have more difficulty in protecting your interests in the face of actions by theour management, directors or controlling shareholders than would shareholders of a corporation incorporated in a United States jurisdiction which has developed a relatively more substantial body of case law.
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We are incorporated in the Marshall Islands, and all of our officers and directors are non-U.S. residents. It may be difficult to serve legal process or enforce judgments against us, our directors or our management.
We are incorporated under the laws of the Republic of the Marshall Islands, and substantially all of our assets are located outside of the United States. Our principal executive office is located in Cyprus. In addition, all of our directors and officers are non-residents of the United States, and substantially all of their assets are located outside the United States. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United States if you believe that your rights have been infringed under securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Republic of the Marshall Islands and of other jurisdictions may prevent or restrict you from enforcing a judgment against our assets or our directors and officers. Although you may bring an original action against us or our affiliates in the courts of the Marshall Islands, and the courts of the Marshall Islands may impose civil liability, including monetary damages, against us or our affiliates for a cause of action arising under Marshall Islands law, it may be impracticable for you to do so.
Anti-takeover
We are subject to certain anti-takeover provisions in our organizational documents and in our stockholder rights planthat could have the effect of discouraging, delaying or preventing a merger or acquisition, or could make it difficult for our shareholders to replace or remove our current Board, whichand could adversely affect the market price of our common shares.
Several provisions of our Articles of Incorporation and Bylaws could make it difficult for our shareholders to change the composition of our Board in any one year, preventing them from changing the composition of management. In addition, the same provisions may discourage, delay or prevent a merger or acquisition that shareholders may consider favorable. These provisions include:
authorizing our Board to issue "blank check"“blank check” preferred shares without shareholder approval;
providing for a classified Board with staggered, three-year terms;
establishing certain advance notice requirements for nominations for election to our Board or for proposing matters that can be acted on by shareholders at shareholder meetings;
prohibiting cumulative voting in the election of directors;
limiting the persons who may call special meetings of shareholders; and
establishing supermajority voting provisions with respect to amendments to certain provisions of our Articles of Incorporation and Bylaws.
These
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On November 21, 2017, our Board declared a dividend of one preferred share purchase right (a “Right”), for each outstanding common share and adopted a shareholder rights plan, as set forth in the Stockholders Rights Agreement dated as of November 20, 2017 (the “Rights Agreement”), by and between the Company and American Stock Transfer & Trust Company, LLC, as rights agent. Each Right allows its holder to purchase from the Company one one-thousandth of a share of Series C Participating Preferred Stock, or a Series C Preferred Share, for the Exercise Price of $150.00 once the Rights become exercisable. This portion of a Series C Preferred Share will give the shareholder approximately the same dividend, voting and liquidation rights as would one common share. The Board adopted the Rights Agreement to protect shareholders from coercive or otherwise unfair takeover tactics. In general terms, it imposes a significant penalty upon any person or group that acquires 15% or more of our outstanding common shares without the approval of our Board. If a shareholder’s beneficial ownership of our common shares as of the time of the public announcement of the rights plan and associated dividend declaration is at or above the applicable threshold, that shareholder’s then-existing ownership percentage would be grandfathered, but the rights would become exercisable if at any time after such announcement, the shareholder increases its ownership percentage by 1% or more. Our Chairman, Chief Executive Officer and Chief Financial Officer, Petros Panagiotidis and Thalassa Investment Co. S.A. (“Thalassa”) are exempt from these provisions. For a full description of the rights plan, see “Item 10. Additional Information¾B. Stockholders Rights Agreement” and Exhibit 2.2 to this annual report.

The Rights may have anti-takeover effects. The Rights will cause substantial dilution to any person or group that attempts to acquire us without the approval of our Board. As a result, the overall effect of the Rights may be to render more difficult or discourage any attempt to acquire us. Because our Board can approve a redemption of the Rights for a permitted offer, the Rights should not interfere with a merger or other business combination approved by our Board.
In addition to the Rights above, we have issued 12,000 Series B Preferred Shares (representing all the issued and outstanding Series B Preferred Shares) to a company controlled by Petros Panagiotidis, Thalassa, each of which has the voting power of 100,000 common shares. The Series B Preferred Shares currently represent 92.7% of the aggregate voting power of our total issued and outstanding share capital and therefore grant Mr. Panagiotidis a controlling vote in most shareholder matters. See “—Our Chairman, Chief Executive Officer and Chief Financial Officer, who may be deemed to beneficially own, directly or indirectly, 100% of our Series B Preferred Shares, has control over us” and “Item 10. Additional Information—B. Memorandum and Articles of Association.”
Further, lenders have imposed provisions prohibiting or limiting a change of control, subject to certain exceptions, on all of our credit facilities. See “—Our credit facilities contain, and we expect that any new or amended credit facility we may enter into will contain, restrictive covenants that we may not be able to comply with due to economic, financial or operational reasons and can limit, or may limit the future, our business and financing activities.” Our management agreements similarly permit our fleet managers to terminate these agreements in the event of a change of control. For further information on our management agreements, see “Item 7.B. Major Shareholders and Related Party Transactions — Related Party Transactions” and Note 3 to our consolidated financial statements included elsewhere in this annual report.

The foregoing anti-takeover provisions could substantially impede the ability of public shareholders to benefit from a change in control and, as a result, may adversely affect the market price of our common shares and your ability to realize any potential change of control premium.
Our Chairman, Chief Executive Officer and Chief Financial Officer, who may be deemed to beneficially own, directly or indirectly, 100% of our Series B Preferred Shares, has control over us.
Our Chairman, Chief Executive Officer and Chief Financial Officer, Mr. Petros Panagiotidis, may be deemed to beneficially own, directly or indirectly, all of the 12,000 outstanding shares of our Series B Preferred Shares. The shares of Series B Preferred Shares each carry 100,000 votes. The Series B Preferred Shares currently represent 0.01% of our total issued and outstanding share capital and 92.7% of the aggregate voting power of our total issued and outstanding share capital. By his ownership of 100% of our Series B Preferred Shares, Mr. Panagiotidis has control over our actions. The interests of Mr. Panagiotidis may be different from your interests.
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We are an "emerging“emerging growth company"company”, and we cannot be certain if the reduced requirements applicable to emerging growth companies make our securities less attractive to investors.
We are an "emerging“emerging growth company"company” as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"“JOBS Act”). As an emerging growth company, we are not required to comply with, among other things, the auditor attestation requirements of the Sarbanes-Oxley Act. Investors may find our securities less attractive because we rely on this provision. If investors find our securities less attractive as a result, there may be a less active trading market for our securities and prices of the securities may be more volatile.
U.S. tax authorities could treat us as a "passive“passive foreign investment company"company”, which could have adverse U.S. federal income tax consequences to U.S. shareholders.
A foreign corporation will be treated as a "passive“passive foreign investment company"company” (a “PFIC”), or PFIC, for U.S. federal income tax purposes if either (1) at least 75% of its gross income for any taxable year consists of certain types of "passive income"“passive income” or (2) at least 50% of the average value of the corporation'scorporation’s assets produce or are held for the production of those types of "passive income"“passive income”. For purposes of these tests, "passive income"“passive income” includes dividends, interest, and gains from the sale or exchange of investment property and rents and royalties other than rents and royalties which are received from unrelated parties in connection with the active conduct of a trade or business. For purposes of these tests, income derived from the performance of services does not constitute "passive“passive income,"” whereas rental income would generally constitute "passive income"“passive income” to the extent not attributable to the active conduct of a trade or business. U.S. shareholders of a PFIC are subject to a disadvantageous U.S. federal income tax regime with respect to the income derived by the PFIC, the distributions they receive from the PFIC and the gain, if any, they derive from the sale or other disposition of their shares in the PFIC.
We do not believe that we will be treated as a PFIC for any taxable year. However, our status as a PFIC is determined on an annual basis and will depend upon the operations of our vessels and our other activities during each taxable year. In this regard, we intend to treat the gross income we derive or are deemed to derive from our spot chartering and time chartering activities as services income, rather than rental income. Accordingly, we believe that our income from our time chartering activities does not constitute "passive“passive income,"” and the assets that we own and operate in connection with the production of that income do not constitute passive assets.
There is, however, no direct legal authority under the PFIC rules addressing our method of operation. Accordingly, no assurance can be given that the U.S. Internal Revenue Service or IRS,(the “IRS”), or a court of law will accept our position, and there is a risk that the IRS or a court of law could determine that we are a PFIC. Moreover, no assurance can be given that we would not constitute a PFIC for any taxable year we become unable to acquire vessels in a timely fashion or if there were to be changes in the nature and extent of our operations.
If the IRS were to find that we are or have been a PFIC for any taxable year, our U.S. shareholders would face adverse U.S. federal income tax consequences and information reporting obligations. Under the PFIC rules, unless those shareholders made an election available under the Internal Revenue Code (which election could itself have adverse consequences for such shareholders, as discussed below under "Taxation—“Taxation—U.S. Federal Income Tax Considerations—Passive Foreign Investment Company Status and Significant Tax Consequences"Consequences”), such shareholders would be liable to pay U.S. federal income tax upon excess distributions and upon any gain from the disposition of our common shares at the then prevailing income tax rates applicable to ordinary income plus interest as if the excess distribution or gain had been recognized ratably over the shareholder'sshareholder’s holding period of our common shares. Please see the section of this annual report entitled "Item“Item 10. Additional Information—E. Taxation—U.S. Federal Income Tax Considerations—Passive Foreign Investment Company Status and Significant Tax Consequences"Consequences” for a more comprehensive discussion of the U.S. federal income tax consequences to U.S. shareholders if we are treated as a PFIC.
35


We may have to pay tax on United States source income, which would reduce our earnings, cash from operations and cash available for distribution to our shareholders.
Under the United States Internal Revenue Code of 1986 or the Code,(the “Code”), 50% of the gross shipping income of a vessel owning or chartering corporation, such as ourselves and our subsidiaries, that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States, may be subject to a 4% U.S. federal income tax without allowance for deduction, unless that corporation qualifies for exemption from tax under Section 883 of the Code and the applicable Treasury Regulations promulgated thereunder.
29
We expectintend to take the position that we will notand each of our subsidiaries qualify for this statutory tax exemption for our 2021 and future taxable years. However, as discussed below under “Taxation—U.S. Federal Income Tax Considerations—U.S. Federal Income Taxation of Our Company”, whether we qualify for this exemption in view of our share structure is unclear, and there can be no assurance that the 2020 taxable year and as suchexemption from tax under Section 883 of the Code will be available to us.
If we willor our subsidiaries are not entitled to this exemption, we would be subject to an effective 2% U.S. federal income tax on the gross shipping income we derive during the year that are attributable to the transport of cargoes to or from the United States. The imposition ofIf this tax were imposed for our 2021 taxable year, we anticipate that U.S. source income taxes of approximately $497,339 would be recognized for the 2020 taxable year isended December 31, 2021, and we have included a reserve for this amount in our annual consolidated financial statements. However, there can be no assurance that such taxes would not expected to have a material negative effect on our business and cash flows, however, we cannot guarantee that it will not do sobe materially higher or lower in any future taxable years.
Risks Relating to Our Series A Preferred Shares
Our Series A Preferred Shares rank senior to our common shares with respect to dividends, distributions and payments upon liquidation, which could have an adverse effect on the value of our common shares.
The rights of the holders of our Series A Preferred Shares rank senior to the obligations to holders of our common shares. Upon our liquidation, the holders of Series A Preferred Shares will be entitled to receive a liquidation preference of $30.00 per share, plus all accrued but unpaid dividends, prior and in preference to any distribution to the holders of any other class of our equity securities, including our common shares. The Series A Preferred Shareholders agreed to waive all dividend payment obligations on the Series A Preferred Shares during the period from July 1, 2019 until December 31, 2021. The existence of the Series A Preferred Shares could have an adverse effect on the value of our common shares.
We may not have sufficient cash from our operations to enable us to pay dividends on our Series A Preferred Shares following the payment of expenses and the establishment of any reserves.
Starting on January 1, 2022, the Series A Preferred Shareholders will be entitled to semi-annual dividends on our Series A Preferred Shares only from funds legally available for such purpose when, as and if declared by our Board. We may not have sufficient cash available to pay our dividends semi-annually. The amount of dividends we can pay on our Series A Preferred Shares depends upon the amount of cash we generate from and use in our operations, which may fluctuate.
The amount of cash we have available for dividends on our Series A Preferred Shares will not depend solely on our profitability. The actual amount of cash we have available to pay dividends on our Series A Preferred Shares depends on many other factors, including the following:
changes in our operating cash flow, capital expenditure requirements, working capital requirements and other cash needs;
restrictions under any current or future credit facilities or any future debt securities on our ability to pay dividends if an event of default has occurred and is continuing or if the payment of the dividend would result in an event of default, or under certain facilities if it would result in the breach of certain financial covenants;
the amount of any cash reserves established by our Board; and
restrictions under Marshall Islands law, which generally prohibit the payment of dividends other than from surplus (retained earnings and the excess of consideration received for the sale of shares above the par value of the shares) or while a company is insolvent or would be rendered insolvent by the payment of such a dividend.
36


The amount of cash we generate from our operations may differ materially from our net income or loss for the period, which is affected by non-cash items, and our Board in its discretion may elect not to declare any dividends. As a result of these and the other factors mentioned above, we may pay dividends during periods when we record losses and may not pay dividends during periods when we record profits.
The Series A Preferred Shares represent perpetual equity interests.
The Series A Preferred Shares represent perpetual equity interests in us and, unlike our indebtedness, do not give rise to a claim for payment of a principal amount at a particular date. As a result, holders of the Series A Preferred Shares may be required to bear the financial risks of an investment in the Series A Preferred Shares for an indefinite period of time. In addition, the Series A Preferred Shares will rank junior to all of our indebtedness and other liabilities, and to any other senior securities we may issue in the future with respect to assets available to satisfy claims against us.
Our Series A Preferred Shares are subordinate to our indebtedness, and your interests could be diluted by the issuance of additional preferred shares, including additional Series A Preferred Shares, and by other transactions.
Our Series A Preferred Shares are subordinated to all indebtedness. Therefore, our ability to pay dividends on, redeem or pay the liquidation preference on our Series A Preferred Shares in liquidation or otherwise may be subject to prior payments due to the holders of our indebtedness. Our future indebtedness may include restrictions on, our ability to pay dividends on or redeem preferred shares. Our Articles of Incorporation currently authorize the issuance of up to 50,000,000 preferred shares, par value $0.001 per share. Of these preferred shares, 480,000 shares have been designated Series A Preferred Shares. The issuance of additional Series A Preferred Shares would dilute the interests of holders of our Series A Preferred Shares, and any current or future indebtedness could affect our ability to pay dividends on, redeem or pay the liquidation preference on our Series A Preferred Shares. The Series A Preferred Shares do not contain any provisions affording the holders of our Series A Preferred Shares protection in the event of a highly-leveraged or other transaction, including a merger or the sale, lease or conveyance of all or substantially all our assets or business, which might adversely affect the holders of our Series A Preferred Shares, so long as the rights of our Series A Preferred Shares are not directly materially and adversely affected.
We may redeem the Series A Preferred Shares, and holders of Series A Preferred Shares may not be able to reinvest the redemption price they receive in a similar security.
We may, at our option, redeem Series A Preferred Shares, in whole or in part, at any time or from time to time. We may have an incentive to redeem Series A Preferred Shares voluntarily if market conditions allow us to issue other preferred shares or debt securities at a rate that is lower than the dividend on the Series A Preferred Shares. If we redeem Series A Preferred Shares, then from and after the redemption date, dividends will cease to accrue on the Series A Preferred Shares, the Series A Preferred Shares shall no longer be deemed outstanding and all of the rights of the holders of those shares will terminate, except the right to receive the redemption price plus accumulated and unpaid dividends, if any, payable upon redemption. If we redeem the Series A Preferred Shares for any reason, the Series A Preferred Shareholders may not be able to reinvest the redemption price they receive in a similar security.
Holders of Series A Preferred Shares have extremely limited voting rights.
The voting rights of the Series A Preferred Shares are extremely limited. Our common shares and Series B Preferred Shares are the only outstanding classes or series of our shares carrying full voting rights. Holders of Series A Preferred Shares have no voting rights other than the ability to approve any amendments to our Articles of Incorporation that adversely alters the preferences, powers or rights of the Series A Preferred Shares.
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Our ability to pay dividends on and to redeem our Series A Preferred Shares is limited by the requirements of Marshall Islands law.
Marshall Islands law provides that we may pay dividends on and redeem the Series A Preferred Shares only to the extent that assets are legally available for such purposes. Legally available assets generally are limited to our surplus, which essentially represents our retained earnings and the excess of consideration received by us for the sale of shares above the par value of the shares. In addition, under Marshall Islands law we may not pay dividends on or redeem Series A Preferred Shares if we are insolvent or would be rendered insolvent by the payment of such a dividend or the making of such redemption.

ITEM 4.INFORMATION ON THE COMPANY

A.History and Development of the Company
We are a growth-oriented global shipping company that was incorporated in the Republic of the Marshall Islands in September 2017 for the purpose of acquiring, owning, chartering and operating oceangoing cargo vessels. We are a provider of worldwide seaborne transportation services for dry bulk cargo as well as crude oil and refined petroleum products. During 2021 and as of the date of this report, we grew our dry bulk fleet from six to 20 dry bulk vessels, and we established our tanker operations by acquiring seven Aframax/LR2 and two Handysize tanker vessels. As a result, as of March 26, 2021,the date of this annual report, our Fleetfleet consisted of 920 dry bulk carriers with an aggregate cargo carrying capacity of 1.7 million dwt and 2an average age of 12.3 years, seven Aframax/LR2 tankers with an aggregate cargo carrying capacity of 1.00.8 million dwt and an average age of 14.3 years. Upon the successful consummation of our recent vessel acquisitions, as further discussed under B. Business Overview—Fleet Development, our Fleet will consist of 14 vessels,17.5 years and two Handysize tankers with an aggregate cargo carrying capacity of 1.30.1 million dwt consisting of 1 Capesize, 5 Kamsarmax and 6 Panamax dry bulk vessels and 2 Aframax LR2 tankers and an average age of 13.516.1 years. The average age of our entire fleet is 13.9 years.
Our fleet vessels operate in the time charter and voyage charter markets, while some of our tanker vessels currently operate in pools. Our commercial strategy primarily focuses on deploying our Fleetfleet under a mix of period time charters and trip time charters according to our assessment of market conditions, adjusting the mix of these charters to take advantage of the relatively stable cash flows and high utilization rates associated with period time charters or to profit from attractive trip charter rates during periods of strong charter market conditions.
Our principal executive office is at 223 Christodoulou Chatzipavlou Street, Hawaii Royal Gardens, 3036 Limassol, Cyprus. Our telephone number at that address is + 357 25 357 767. Our website is www.castormaritime.com. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The address of the SEC'sSEC’s internet site is www.sec.gov. None of the information contained on, or that can be accessed through, these websites is incorporated into or forms a part of this annual report.
For an overview of our Fleetfleet and information regarding the development of our Fleet,fleet, including vessel acquisitions, please see "B.“—Item 4.B. Business Overview—Our Fleet"fleet.”
Equity Transactions
For a description of our recent equity transactions, please see “Item 5.B. Operating and Financial Review and Prospects— Liquidity and Capital Resources—Equity Transactions.”
Fleet Development and Vessel Capital Expenditures
From the end of 2020 until the date of this annual report, we grew our fleet from six vessels to 29 vessels through the acquisition of 23 new vessels, consisting of two Handysize tanker vessels that currently comprise our Handysize tanker segment, seven Aframax/LR2 tanker vessels that currently comprise our Aframax/LR2 tanker segment and 14 dry bulk vessels that brought the current size of our dry bulk segment to 20 vessels. For further information on vessel acquisitions and the series of financing transactions that enabled our vessel acquisitions, see “—B. Business Overview—Fleet Development” below and Notes 6 and 7 to our consolidated financial statements included in this annual report.
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As of the date of this annual report, 16 of the 20 dry-bulk segment vessels, one of the two Handysize tanker segment vessels and four of the seven Aframax/LR2 tanker segment vessels are equipped with ballast water management system (“BWMS”). We expect to retrofit the seven non-fully equipped and one non-equipped vessels with BWMS during 2022, obtaining operational flexibility worldwide. As of December 31, 2021, we had entered into contracts for the purchase and installation of a BWMS on all of these eight discussed vessels. It is estimated that the contractual obligations related to the purchases on these four dry bulk, one Handysize and three Aframax/LR2 vessels, excluding installation costs, will be approximately $1.0 million, $0.2 million and $2.1 million, respectively, with scheduled payments of $2.6 million in 2022 and $0.7 million in 2023. As of December 31, 2021, we also had outstanding contractual commitments on one fully equipped dry-bulk vessel and one fully equipped Handysize tanker vessel amounting to $0.1 million, expected to be settled in 2022, bringing our total capital commitment for BWMS to $3.4 million. All remaining BWMS commitments are expected to be settled until 2023 and we expect to finance these capital expenditures with cash on hand.
During the years ended December 31, 2019, 2020 and 2021, we made capital expenditures of approximately $0.2 million, $1.0 million and $1.8 million, respectively, relating to the installation of BWMS on our vessels.
Financing Transactions
On January 22, 2021, we entered into a $15.29 million senior term loan facility with Hamburg Commercial AG, through and secured by two of the Company’s dry bulk vessel ship-owning subsidiaries, those owning the Magic Horizon and the Magic Nova. This facility has a tenor of four years from the drawdown date and bears interest at a 3.30% margin over LIBOR per annum. The loan was drawn down in full on January 27, 2021. We used the net proceeds from the facility to support our growth plans and for general corporate purposes.
On April 27, 2021, we entered into a $18.0 million senior term loan facility with Alpha Bank S.A., through and secured by two of the Company’s tanker vessel ship-owning subsidiaries, those owning the Wonder Sirius and the Wonder Polaris. This facility has a tenor of four years from the drawdown date and bears interest at a 3.20% margin over LIBOR per annum. The loan was drawn down in full in two tranches on May 7, 2021. We used the net proceeds from the facility to support our growth plans and for general corporate purposes.
On July 23, 2021, we entered into a $40.75 million senior term loan facility with Hamburg Commercial Bank AG, through and secured by four of the Company’s dry bulk vessel ship-owning subsidiaries, those owning the Magic Thunder, the Magic Nebula, the Magic Eclipse and the Magic Twilight. This facility has a tenor of five years from the drawdown date and bears interest at a 3.10% margin over LIBOR per annum. The loan was drawn down in full in four tranches on July 27, 2021. We used the net proceeds from the respective facility to support our growth plans and for general corporate purposes.
On November 22, 2021, we entered into a $23.15 million term loan facility with Chailease International Financial Services (Singapore) Pte. Ltd., through and secured by the two of the Company’s dry bulk vessel ship-owning subsidiaries, those owning the Magic Rainbow and Magic Phoenix, and guaranteed by the Company. This facility has a tenor of five years and bears interest at a 4.00% margin over LIBOR per annum. The loan was drawn down in full in two tranches on November 24, 2021. We have used and intend to further use the net proceeds from the facility to support our growth plans and for general corporate purposes.
On January 12, 2022, we entered into a $55.0 million term loan facility with Deutsche Bank AG, through and secured by the five of the Company’s dry bulk vessel ship-owning subsidiaries, those owning the Magic Starlight, the Magic Mars, the Magic Pluto,the Magic Perseus and the Magic Vela, and guaranteed by the Company. This facility has a tenor of five years and bears interest at a 3.15% margin over adjusted SOFR per annum. The loan was drawn down in full in five tranches on January 13, 2022. We intend to use the net proceeds from the facility to support our growth plans and for general corporate purposes.
For more information about our financing agreements which we have entered into in connection with the expansion of our fleet and for other general corporate purposes, please see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Our Borrowing Activities.”
Nasdaq Listing Standards Compliance


On April 14, 2020, we received written notification from the Nasdaq indicating that because the closing bid price of our common shares for 30 consecutive business days, from February 27, 2020, to April 13, 2020, was below the minimum $1.00 per share bid price requirement for continued listing on the Nasdaq, we were not in compliance with Nasdaq Listing Rule 5550(a)(2). We were also informed by the Nasdaq that dueDue to the COVID-19 crisis, we were granted temporary relief has been granted related to minimum listing bid price requirements and our compliance period would bewas suspended until June 30, 2020. Pursuant to the Nasdaq Listing Rule 5810(c)(3)(A), the applicable initial grace period to regain compliance was 180 days, or December 28, 2020, which included the temporary COVID-19 relief period.
On December 30, 2020,Following certain extension periods obtained, we announced that we received a notification letter from the Nasdaq granting us an additional 180-day extension, orhad until June 28, 2021 to regain compliance with Nasdaq'sNasdaq’s minimum bid price requirement (the "Second Compliance Period"). We can cure this deficiency if the closing bid pricerequirement. On May 28, 2021, we effected a one-for-ten reverse stock split of our common shares, is $1.00 per share or higher for the requisite period of time during the Second Compliance Period. Nasdaq may exercise its discretion to extend such requisite amount of time to better evaluate the registrant's ability to sustain long-term compliance with the minimum bid price requirement. We are evaluating all our options to regain compliance within the Second Compliance Period, includingand, as a reverse stock split. During this time, our common shares will continue to be listed and tradedresult, on the Nasdaq Capital Market.June 14, 2021, we regained compliance.
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B.Business Overview

We operate dry-bulk vessels that engage in the worldwide transportation of commodities such as iron ore, coal, soybeans etc., Aframax/LR2 tanker vessels that are engaged in the worldwide transportation of crude oil and Handysize tanker vessels that carry oil and petroleum products. Our management reviews and analyzes operating results for our business over three reportable segments, (i) Dry bulk vessels, (ii) Aframax/LR2 tanker vessels, and (iii) Handysize tanker vessels. During the year ended December 31, 2021, our dry-bulk vessels operated exclusively under time charter contracts, our Aframax/ LR2 tanker vessels operated under time charter contracts, voyage charter contracts and pools and our Handysize tanker vessels operated in a pool. We do not disclose geographic information relating to our segments. When the Company charters a vessel to a charterer, the charterer is free, subject to certain exemptions, to trade the vessel worldwide and, as a result, the disclosure of geographic information is impracticable. For further information, see Note 2 to our consolidated financial statements included elsewhere in this annual report.

Equity transactionsOur Fleet
For a description
The following tables summarize key information about our fleet in each segment as of our recent equity transactions, please see "Item 5. Operating and Financial Review and Prospects – B. Liquidity and Capital Resources – Equity Issuances".March 28, 2022:
Dry Bulk Segment
Vessel Name
Year
Built
Type of
Charter		 Capacity
(dwt)		 Delivered to
Castor		 Gross Charter Rate ($/day)Estimated Earliest Charter ExpirationEstimated Latest Charter Expiration
Panamax         
Magic Nova2010Period Time Charter  78,833 October 2020 
$25,300(1)
October 2022February 2023
Magic Mars2014Period Time Charter  76,822 September 2021 
$21,500(2)
November 2022February 2023
Magic Phoenix2008Period Time Charter  76,636 October 2021 
102% of BPI4TC(3) (4)
September 2022December 2022
Magic Horizon2010Trip Time Charter  76,619 October 2020 
$20,100(5)
March 2022March 2022
Magic Moon2005Trip Time Charter  76,602 October 2019 $25,000April 2022April 2022
Magic P2004Period Time Charter  76,453 February 2017 $27,500April 2022July 2022
Magic Sun2001Trip Time Charter  75,311 September 2019 $17,500 plus $750,000 Ballast BonusApril 2022April 2022
Magic Vela2011Trip Time Charter  75,003 May 2021 $16,000 plus $550,000 Ballast BonusApril 2022April 2022
Magic Eclipse2011Period Time Charter  74,940 June 2021 $28,500April 2022July 2022
Magic Pluto2013Period Time Charter  74,940 August 2021 
$24,000(6)
November 2022February 2023
Magic Callisto2012Period Time Charter  74,930 January 2022 
$27,000(7)
October 2022January 2023
Magic Rainbow2007Trip Time Charter  73,593 August 2020 $16,000April 2022April 2022
Kamsarmax          
Magic Venus2010Trip Time Charter  83,416 March 2021 
$16,300 plus $630,000 Ballast Bonus (8)
April 2022April 2022
Magic Thunder2011Period Time Charter  83,375 April 2021 100% of BPI5TCOctober 2022January 2023
Magic Argo2009Trip Time Charter  82,338 March 2021 
$16,600(9)
April 2022April 2022
Magic Perseus2013Period Time Charter  82,158 August 2021 100% of BPI5TCOctober 2022January 2023
Magic Starlight2015Period Time Charter  81,048 May 2021 
$32,000(10)
September 2022March 2023
Magic Twilight2010Period Time Charter  80,283 April 2021 
$25,000(11)
January 2023April 2023
Magic Nebula2010Period Time Charter  80,281 May 2021 $23,500September 2022November 2022
Capesize                 
Magic Orion2006Period Time Charter  180,200 March 2021 
101% of BCI5TC (12)
October 2022January 2023

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(1)
The vessels’ daily gross charter rate is equal to 92% of BPI5TC. In accordance with the prevailing charter party, on 17/02/2022 owners converted the index-linked rate to fixed from 01/03/2022 until 30/09/2022, at a rate of $25,300 per day. Upon completion of said period, the rate will be converted back to index linked. The benchmark vessel used in the calculation of the average of the Baltic Panamax Index 5TC routes is a non-scrubber fitted 82,500mt dwt vessel (Kamsarmax) with specific age, speed - consumption, and design characteristics.

(2)
The vessels’ daily gross charter rate is equal to 91% of BPI5TC. In accordance with the prevailing charter party, on 20/01/2022 owners converted the index-linked rate to fixed from 01/02/2022 until 30/09/2022, at a rate of $21,500 per day. Upon completion of said period, the rate will be converted back to index linked.

(3)
The benchmark vessel used in the calculation of the average of the Baltic Panamax Index 4TC routes is a non-scrubber fitted 74,000mt dwt vessel (Panamax) with specific age, speed - consumption, and design characteristics.

(4)
In accordance with the prevailing charter party, on 03/03/2022 owners converted the index-linked rate to fixed from 01/04/2022 until 30/09/2022, at a rate of $28,100 per day. Upon completion of said period, the rate will be converted back to index linked.

(5)
Upon completion of current time charter trip, estimated within April, the vessel has been fixed on a time charter period at a gross daily charter rate equal to 103% of the average of Baltic Panamax Index 4TC routes, with a minimum duration of 12 months and a maximum duration of 15 months, at the charterer’s option.

(6)
The vessels’ daily gross charter rate is equal to 91% of BPI5TC. In accordance with the prevailing charter party, on 08/02/2022 owners converted the index-linked rate to fixed from 01/03/2022 until 30/09/2022, at a rate of $24,000 per day. Upon completion of said period, the rate will be converted back to index linked.

(7)
The vessels’ daily gross charter rate is equal to 101% of BPI4TC. In accordance with the prevailing charter party, on 22/02/2022 owners converted the index-linked rate to fixed from 01/03/2022 until 30/09/2022, at a rate of $27,000 per day. Upon completion of said period, the rate will be converted back to index linked.

(8)
Upon completion of current time charter trip, estimated within April, the vessel has been fixed on a time charter period at a gross daily charter rate equal to 100% of the average of Baltic Panamax Index 5TC routes, with a minimum duration of about 13 months and a maximum duration of about 15 months, at the charterer’s option.

(9)
Upon completion of current time charter trip, estimated within April, the vessel has been fixed on a time charter period at a gross daily charter rate equal to 103% of the average of Baltic Panamax Index 5TC routes, with a minimum duration of 12 months and a maximum duration of 15 months, at the charterer’s option.

(10)
The vessels’ daily gross charter rate is equal to 114% of BPI4TC. In accordance with the prevailing charter party, on 19/10/2021 owners converted the index-linked rate to fixed from 01/01/2022 until 30/09/2022, at a rate of $32,000 per day. Upon completion of said period, the rate will be converted back to index linked.

(11)
In accordance with the prevailing charter party, the vessel’s daily gross charter rate is $25,000 per day for the first 30 days and thereafter index-linked at a rate equal to 93% of BPI5TC.

(12)
The benchmark vessel used in the calculation of the average of the Baltic Capesize Index 5TC routes is a non-scrubber fitted 180,000mt dwt vessel (Capesize) with specific age, speed - consumption, and design characteristics.

Aframax/LR2 Tanker Segment
Vessel Name
Year
Built
Type of
Charter		 Capacity
(dwt)		 Delivered to
Castor		 Gross Charter Rate ($/day)  Estimated Earliest Charter Expiration  Estimated Latest Charter Expiration
Aframax/LR2              
Wonder Polaris2005Voyage  115,351 March 2021 $6,500
(1) 
 
31 March 2022 (2)
   N/A
Wonder Sirius2005Unfixed  115,341 March 2021  N/A   N/A   N/A
Wonder Bellatrix2006Voyage  115,341 December 2021 $21,024
(1) 
 
3 April 2022 (2)
   N/A
Wonder Musica2004Unfixed  106,290 June 2021 
N/A 
 
N/A
   N/A
Wonder Avior2004Voyage  106,162 May 2021 $7,440
(1) 
 
16 April 2022 (2)
   N/A
Wonder Arcturus2002Unfixed  106,149 May 2021  N/A   N/A   N/A
Aframax                  
Wonder Vega2005
Tanker Pool (3)
  106,062 May 2021  N/A   N/A   N/A


(1)
For vessels that are employed on the voyage/spot market, the gross daily charter rate is considered as the Daily TCE Rate on the basis of the
expected completion date.

(2)
Estimated completion date of the voyage.

(3)
The vessel is currently participating in an unaffiliated tanker pool specializing in the employment of Aframax tanker vessels.

Handysize Tanker Segment
Vessel Name
Year
Built
Type of
Charter		 Capacity
(dwt)		 Delivered to
Castor		 Gross Charter Rate ($/day)  Estimated Earliest Charter Expiration  Estimated Latest Charter Expiration 
Wonder Mimosa2006
Tanker Pool (1)
  36,718 May 2021  N/A   N/A   N/A 
Wonder Formosa2006
Tanker Pool (1)
  36,660 June 2021  N/A   N/A   N/A 
                    


(1)
The vessel is currently participating in an unaffiliated tanker pool specializing in the employment of Handysize tanker vessels.

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Fleet Development
During the years ended December 31, 2019, 2020 and Vessel Capital Expenditures
As2021 and further as of the date of this annual report, 8we implemented our strategic fleet growth plan by acquiring the vessels listed below:
Dry Bulk Carriers
Vessel NameVessel Type DWT  
Year
Built
 
Country of
Construction
 
Purchase Price
(in million)
 Delivery Date
2019 Acquisitions
Magic SunPanamax  75,311   2001 S. Korea $6.71 09/05/2019
Magic MoonPanamax  76,602   2005 Japan $10.20 10/20/2019
2020 Acquisitions
Magic RainbowPanamax  73,593   2007 China $7.85 08/08/2020
Magic HorizonPanamax  76,619   2010 Japan $12.75 10/09/2020
Magic NovaPanamax  78,833   2010 Japan $13.86 10/15/2020
2021 Acquisitions
Magic OrionCapesize  180,200   2006 Japan $17.50 03/17/2021
Magic VenusKamsarmax  83,416   2010 Japan $15.85 03/02/2021
Magic ArgoKamsarmax  82,338   2009 Japan $14.50 03/18/2021
Magic TwilightKamsarmax  80,283   2010 S. Korea $14.80 04/09/2021
Magic NebulaKamsarmax  80,281   2010 S. Korea $15.45 05/20/2021
Magic ThunderKamsarmax  83,375   2011 Japan $16.85 04/13/2021
Magic EclipsePanamax  74,940   2011 Japan $18.48 06/07/2021
Magic StarlightKamsarmax  81,048   2015 China $23.50 05/23/2021
Magic VelaPanamax  75,003   2011 China $14.50 05/12/2021
Magic PerseusKamsarmax  82,158   2013 Japan $21.00 08/09/2021
Magic PlutoPanamax  74,940   2013 Japan $19.06 08/06/2021
Magic MarsPanamax  76,822   2014 S. Korea $20.40 09/20/2021
Magic PhoenixPanamax  76,636   2008 Japan $18.75 10/26/2021
2022 Acquisitions
Magic CallistoPanamax  74,930   2012 Japan $23.55 01/04/2022

Aframax/LR2 Tankers
2021 Acquisitions
Wonder PolarisAframax LR2  115,351   2005 S. Korea $13.60 03/11/21
Wonder SiriusAframax LR2  115,341   2005 S. Korea $13.60 03/22/21
Wonder VegaAframax  106,062   2005 S. Korea $14.80 05/21/21
Wonder AviorAframax LR2  106,162   2004 S. Korea $12.00 05/27/21
Wonder ArcturusAframax LR2  106,149   2002 S. Korea $10.00 05/31/21
Wonder MusicaAframax LR2  106,290   2004 S. Korea $12.00 06/15/21
Wonder BellatrixAframax LR2  115,341   2006 S. Korea $18.15 12/23/21
Handysize Tankers
2021 Acquisitions
Wonder MimosaHandysize  36,718   2006 S. Korea $7.25 05/31/21
Wonder FormosaHandysize  36,660   2006 S. Korea $8.00 06/22/21
All the above-mentioned acquisitions were financed using a mix of cash from operations and the 11 vessels innet cash proceeds from our Fleet are equipped with ballast water management system ("BWMS"), 1 vessel is partly equipped and 2 are non-equipped. We expect to retrofit the 3 non-fully equipped and non-equipped vessels with BWMS within 2022, obtaining operational flexibility worldwide. As of December 31, 2020, we had made capital expenditures of approximately $1.0 million regarding the installation of BWMS on our vessels. It is estimated that the contractual obligations related to these purchases as well as purchases on our remaining fleet vessels (in cases where not already installed), excluding installation costs, will be approximately $0.8 million, with scheduled payments of $0.5 million in 2021 and $0.3 million in 2022.
In connection with our Fleet expansion, we conducted a series of vessel acquisitionsequity and financing transactions, which areas further discussed below under in "B. Business Overview—Fleet Development".
Financing Transactions
On January 23, 2020, we, through one of our ship-owning subsidiaries, entered into $4.5 million secured term loan facility with Chailease International Financial Services Co. Ltd., or the Chailease Financial Services Facility. The loan was drawn down on January 31, 2020, has a tenor of five years from the drawdown date and bears interest at a margin plus LIBOR.
On January 27, 2020, we entered into a securities purchase agreement with YAII PN, LTD, or the Investor, pursuant to which we agreed to sell and the Investor agreed to purchase up to three convertible debentures (individually, a "Convertible Debenture" and collectively, the "$5.0 Million Convertible Debentures") for a maximum aggregate price of $5.0 million. During the period from January 28, 2020 up to June 9, 2020, the Investor had converted the full $5.0 million principal amount and $0.1 million of interest under the $5.0 Million Convertible Debentures for 8,042,078 common shares.
On January 22, 2021, we, through two of our ship-owning subsidiaries, entered into a $15.3 million senior secured term loan facility with Hamburg Commercial AG, or the $15.3 Million Term Loan Facility, secured by the M/V Magic Horizon and the M/V Magic Nova. The $15.3 Million Term Loan Facility has a tenor of four years from the drawdown date and bears interest at a margin plus LIBOR. The loan was drawn down in full on January 27, 2021. The Company intends to use the net proceeds from the $15.3 Million Term Loan Facility to support the Company's growth plans and for general corporate purposes.
For more information about our financing agreements which we have entered into in connection with the expansion of our Fleet and for other general corporate purposes, please see "Item“Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Our Borrowing Activities".Resources.”
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B.Business Overview
Our Fleet
The following table summarizes key information about our Fleet (delivered only vessels) asTable of March 26, 2021:
Vessel NameYear BuiltType of
Charter		Capacity
(dwt)		Delivered to
Castor		Gross Charter Rate ($/day)Estimated Earliest Charter ExpirationEstimated Latest Charter Expiration
Dry bulk vessels       
Panamax       
Magic P2004Period Time Charter76,453February 2017$12,750August 2021November 2021
Magic Sun2001Period Time Charter75,311September 2019$10,200August 2021October 2021
Magic Moon2005Period Time Charter76,602October 2019$10,500July 2021September 2021
Magic Rainbow2007Trip Time Charter73,593August 2020$18,500April 2021April 2021
Magic Horizon2010Period Time Charter76,619October 2020$11,000August 2021December 2021
Magic Nova2010Period Time Charter78,833October 2020$10,400April 2021August 2021
Kamsarmax       
Magic Venus2010Period Time Charter83,416March 2021$18,500August 2021October 2021
Magic Argo2009Trip Time Charter82,338March 2021$25,100June 2021June 2021
Capesize       
Magic Orion2006Trip Time Charter180,200March 2021$21,000April 2021April 2021
Tanker vessels       
Aframax/LR2       
Wonder Polaris2005Period Time Charter115,341March 2021$15,000 + profit sharingFebruary 2022February 2023
Wonder Sirius2005Period Time Charter115,340March 2021$15,000 + profit sharingFebruary 2022February 2023

Fleet Development
On July 25, 2019, we, through one of our wholly-owned subsidiaries, entered into an agreement to purchase a 2001 Korean- built Panamax dry bulk carrier, or the M/V Magic Sun, from an unaffiliated third party for a purchase price of $6.7 million. The M/V Magic Sun was delivered to us on September 5, 2019. The acquisition of the M/V Magic Sun was financed with both cash on hand and the proceeds from a $5.0 million unsecured term loan agreement entered into between the Company and an entity controlled by Petros Panagiotidis, as further described under "Item 5 – Operating and Financial Review and Prospects – B. Liquidity and Capital Resources – Our Borrowing Activities".


On October 14, 2019, we, through one of our wholly-owned subsidiaries, entered into an agreement to purchase a 2005 Japanese-built Panamax dry bulk carrier, or the M/V Magic Moon, from a third party in which a family member of our Chairman, Chief Executive Officer and Chief Financial Officer had an interest, for a purchase price of $10.2 million. The M/V Magic Moon was delivered to us on October 20, 2019. The acquisition of the M/V Magic Moon was financed with a combination of cash on hand, the net cash proceeds from sales under our ATM Program and the proceeds from a $7.5 million interest free unsecured bridge loan, which was provided to the Company by an entity controlled by Petros Panagiotidis, as further described under "Item 7. Major Shareholders and Related Party Transactions – B. Related Party Transactions – Loans – $7.5 Million Shareholder Bridge Loan".
On June 30, 2020, we, through one of our wholly-owned subsidiaries, entered into an agreement to purchase a 2007 Chinese- built Panamax dry bulk carrier, or the M/V Magic Rainbow, from an unaffiliated third party for a purchase price of $7.85 million. The M/V Magic Rainbow was delivered to us on August 8, 2020. The acquisition of the M/V Magic Rainbow was financed in whole with the proceeds from our debt and equity financings concluded in 2020.
On July 28, 2020, we, through one of our wholly-owned subsidiaries, entered into an agreement to purchase a 2010 Japanese- built Panamax dry bulk carrier, or the M/V Magic Horizon, from an unaffiliated third party for a purchase price of $12.75 million. The M/V Magic Horizon was delivered to us on October 9, 2020. The acquisition of the M/V Magic Horizon was financed in whole with the proceeds from our debt and equity financings concluded in 2020.
On September 28, 2020, we, through one of our wholly-owned subsidiaries, entered into an agreement to purchase a 2010 Japanese-built Panamax dry bulk carrier, or the M/V Magic Nova, from an unaffiliated third party for a purchase price of $13.86 million. The M/V Magic Nova was delivered to us on October 15, 2020. The acquisition of the M/V Magic Nova was financed in whole with the proceeds from our debt and equity financings concluded in 2020.
On January 20, 2021, we, through one of our wholly-owned subsidiaries, entered into an agreement to purchase a 2006 Japanese-built Capesize dry bulk carrier, or the M/V Magic Orion, from an unaffiliated third party for a purchase price of $17.5 million. The M/V Magic Orion was delivered to us on March 17, 2021. The acquisition of the M/V Magic Orion was financed in whole with cash on hand.
On January 28, 2021, we, through one of our wholly-owned subsidiaries, entered into an agreement to purchase a 2010 Japanese-built Kamsarmax dry bulk carrier, or the M/V Magic Venus, from an unaffiliated third party for a purchase price of $15.85 million. The M/V Magic Venus was delivered to us on March 2, 2021. The acquisition of the M/V Magic Venus was financed in whole with cash on hand.
On February 2, 2021, we, through one of our wholly-owned subsidiaries, entered into an agreement to purchase a 2009 Japanese-built Kamsarmax dry bulk carrier, or the M/V Magic Argo, from an unaffiliated third party for a purchase price of $14.5 million. The M/V Magic Argo was delivered to us on March 18, 2021. The acquisition of the M/V Magic Argo was financed in whole with cash on hand.
On February 5, 2021, we, through two of our wholly-owned subsidiaries, entered into agreements to purchase two 2005 Korean-built Aframax LR2 tankers for an aggregate purchase price of $27.2 million from an unaffiliated third-party seller. Both vessels have attached time charter contracts with a reputable charterer with an estimated remaining term of about one year, each of which shall provide the Company with a minimum gross daily hire of $15,000 and have a 50% profit sharing arrangement over such level based on a predetermined formula. The charterer has the option to extend the duration of each contract for an additional one-year term. The M/T Wonder Polaris and the M/T Wonder Sirius were delivered to us on March 11, 2021 and March 22, 2021, respectively. The acquisition of both vessels was financed in whole with cash on hand.
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On February 18, 2021, we, through one of our wholly-owned subsidiaries, entered into an agreement to purchase a 2010 Japanese-built Kamsarmax dry bulk carrier, from an unaffiliated third party for a purchase price of $14.8 million. The acquisition is expected to be consummated by taking delivery of the vessel sometime in the beginning of the second quarter of this year, is expected to be financed in whole with cash on hand and is subject to the satisfaction of certain customary closing conditions.
On March 9, 2021, we, through one of our wholly-owned subsidiaries, entered into an agreement to purchase a 2010 Korean-built Kamsarmax dry bulk carrier from an unaffiliated third party for a purchase price of $15.5 million. The acquisition is expected to be consummated by taking delivery of the vessel within the second quarter of this year, is expected to be financed in whole with cash on hand and is subject to the satisfaction of certain customary closing conditions.
On March 11, 2021, we, through one of our wholly-owned subsidiaries, entered into an agreement to purchase a 2011 Japanese-built Kamsarmax dry bulk carrier from an unaffiliated third party for a purchase price of $16.9 million. The acquisition is expected to be consummated by taking delivery of the vessel sometime between the second and third quarter of this year, is expected to be financed in whole with cash on hand and is subject to the satisfaction of certain customary closing conditions.
Chartering of our Fleet
We actively market our vessels, and expect to market the vessels that we have agreed to purchase once they are delivered to us, in the short, medium and long-term charter markets in order to secure optimal employment in the dry bulk and tanker shipping markets. As of March 26,December 31, 2021, threeseven of our dry bulk vessels were chartered on the trip time charter market, our two Handysize tankers and one of our Aframax/LR2 tankers were participating in pools and three of our Aframax/LR2 tankers were chartered on the voyage charter market, totaling 13 vessels employed in the spot market. TripOur remaining 15 vessels as of December 31, 2021 (excluding the Magic Callisto that was delivered to us in January 2022), consisting of 12 dry bulk vessels  and three Aframax/ LR2 tankers were employed under medium-term time charters which have either a fixed or floating (i.e., index-linked) charter hire rate. Among them, three of our Aframax/ LR2 tankers also incorporated a profit-sharing arrangement over and above the fixed charter rate level.
Charter rates in the spot market are volatile and sometimes fluctuate on a seasonal and year-to-year basis. Fluctuations derive from imbalances in the availability of cargoes for shipment and the number of vessels available at any given time to transport these cargoes. Vessels operating in the tripspot market generate revenue that is less predictable than those under period time charters but may enable us to capture increased profit margins during periods of improvements in the dry bulk and tanker markets. Downturns in the dry bulk and/or tanker industries would result in a reduction in profit margins and could lead to losses. Our remaining eight vessels were employed under medium term time charters which have a fixed charter hire rate and, particularly with regards to our Aframax LR2 tanker which we have purchased with time charter attached, a profit sharing arrangement over and above that fixed charter rate level. InFollowing the future,dry bulk market recovery in 2021, we may opportunistically look to employ more of our dry bulkvessels in the spot market under trip time charter contracts, should the marker outlook become more attractive.voyage charter contracts or pooling arrangements.
Management of our Business
Our vessels are technically managed by Pavimar, a company controlled by Ismini Panagiotidis, the sister of our Chairman, Chief Executive Officer and Chief Financial Officer, Petros Panagiotidis. Under the technical management agreements, our ship-owning subsidiaries pay a $600 daily fee to Pavimar for the provision of a wide range of shipping services such as crew management, technical management, operational employment management, insurance arrangements,management, provisioning, bunkering, accounting and audit support services, which itPavimar may choose to subcontract to other parties at its discretion. As of December 31, 2021, Pavimar had subcontracted the technical management of three of the Company’s dry bulk vessels and onenine of our wholly-owned subsidiaries have entered into a management agreement with Fleet Ship Management Inc. ("Fleet Ship"), aits tanker vessels to third-party ship-management company, pursuant to which Fleet Ship provides technical management to the M/V Magic Nova.companies. Pavimar pays, at its own expense, Fleet Shipthese third-party management companies a fee for the services it has subcontracted to it,them, without burdening the Company with any additional cost.


Our vessels are commercially managed by Castor Ships, a company controlled by our Chairman, Chief Executive Officer and Chief Financial Officer. Castor Ships manages our business overall and provides us with commercial, chartering and administrative services, including, but not limited to, securing employment for our Fleet,fleet, arranging and supervising the vessels'vessels’ commercial operations, handling all of the Company'sCompany’s vessel sale and purchase transactions, undertaking related shipping project and management advisory and support services, as well as other associated services requested from time to time by us and our ship-owning subsidiaries. In exchange for these services, we and our subsidiaries pay Castor Ships (i) a flat quarterly management fee in the amount of $0.3 million for the management and administration of our business, (ii) a daily fee of $250 per vessel for the provision of commercial services, (iii) a commission rate of 1.25% on all charter agreements and (iv) a commission of 1% on each vessel sale and purchase transaction.
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For further information, see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions.”


The three Kamsarmax vessels that we have agreed to purchase and which we expect to take delivery of in the near term, will be technically and commercially managed by Pavimar and Castor Ships upon their delivery to us.
Environmental and Other Regulations in the Shipping Industry
Government regulations and laws significantly affect the ownership and operation of our Fleet.fleet. We are subject to international conventions and treaties, national, state and local laws and regulations in force in the countries in which our vessels may operate or are registered relating to safety and health and environmental protection including the storage, handling, emission, transportation and discharge of hazardous and non-hazardous materials, and the remediation of contamination and liability for damage to natural resources. Compliance with such international conventions, laws, regulations, insurance and other requirements entails significant expense, including for vessel modifications and implementation of certain operating procedures.
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A variety of government and private entities subject our vessels to both scheduled and unscheduled inspections. These entities include the local port authorities (applicable national authorities such as the United States Coast Guard ("USCG"(“USCG”), harbor master or equivalent), classification societies, flag state administrations (countries of registry) and charterers, particularly terminal operators. Certain of these entities require us to obtain permits, licenses, certificates and other authorizations for the operation of our vessels. Failure to maintain necessary permits or approvals could require us to incur substantial costs or result in the temporary suspension of the operation of our vessels.
Increasing environmental concerns have created a demand for vessels that conform to stricter environmental standards. We are required to maintain operating standards for our vessels that emphasize operational safety, quality maintenance, continuous training of our officers and crews and compliance with United States and international regulations. We believe that the operation of our vessels is in substantial compliance with applicable environmental laws and regulations and that our vessels have all material permits, licenses, certificates or other authorizations necessary for the conduct of our operations. However, because such laws and regulations frequently change and may impose increasingly stricter requirements, we cannot predict the ultimate cost of complying with these requirements, or the impact of these requirements on the resale value or useful lives of our vessels. In addition, a future serious marine incident that causes significant adverse environmental impact could result in additional legislation or regulation that could negatively affecthave a material adverse effect on our profitability.business, financial condition, and operating results.
International Maritime Organization
The International Maritime Organization, the United Nations agency for maritime safety and the prevention of pollution by vessels (the "IMO"“IMO”), has adopted the International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating thereto, collectively referred to as MARPOL 73/78 and herein as "MARPOL,"“MARPOL”, the International Convention for the Safety of Life at Sea of 1974 ("(“SOLAS Convention"Convention”), and the International Convention on Load Lines of 1966 (the "LL Convention").1966. MARPOL establishes environmental standards relating to oil leakage or spilling, garbage management, sewage, air emissions, handling and disposal of noxious liquids and the handling of harmful substances in packaged forms. MARPOL is applicable to dry bulk, tanker and LNG carriers, among other vessels, and is broken into six Annexes, each of which regulates a different source of pollution. Annex I relates to oil leakage or spilling; Annexes II and III relate to harmful substances carried in bulk in liquid or in packaged form, respectively; Annexes IV and V relate to sewage and garbage management, respectively; andrespectively. Annex VI, lastly,which relates to air emissions. Annex VIemissions, was separately adopted by the IMO in September of 1997; new emissions standards, titled IMO-2020, took effect on January 1, 2020.
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Air Emissions
In September of 1997, the IMO adopted Annex VI to MARPOL to address air pollution from vessels. Effective May 2005, Annex VI sets limits on sulfur oxide and nitrogen oxide emissions from all commercial vessel exhausts and prohibits "deliberate emissions"“deliberate emissions” of ozone depleting substances (such as halons and chlorofluorocarbons), emissions of volatile compounds from cargo tanks, and the shipboard incineration of specific substances. Annex VI also includes a global cap on the sulfur content of fuel oil and allows for special areas to be established with more stringent controls on sulfur emissions, as explained below. Emissions of "volatile“volatile organic compounds"compounds” from certain tankers, and the shipboard incineration (from incinerators installed after January 1, 2000) of certain substances (such as polychlorinated biphenyls, or PCBs) are also prohibited. We believe that our vessels are currently compliant in all material respects with these regulations.
The Marine Environment Protection Committee, or "MEPC,"“MEPC,” adopted amendments to Annex VI regarding emissions of sulfur oxide, nitrogen oxide, particulate matter and ozone depleting substances, which entered into force on July 1, 2010. The amended Annex VI seeks to further reduce air pollution by, among other things, implementing a progressive reduction of the amount of sulfur contained in any fuel oil used on board ships. On October 27, 2016, at its 70th session, the MEPC agreed to implement a global 0.5% m/m sulfur oxide emissions limit (reduced from 3.50%) starting from January 1, 2020. This limitation can be met by using low-sulfur compliant fuel oil, alternative fuels, or certain exhaust gas cleaning systems. Ships are now required to obtain bunker delivery notes and International Air Pollution Prevention ("IAPP") Certificates from their flag states that specify sulfur content. Additionally, at MEPC 73, amendments to Annex VI to prohibit the carriage of bunkers above 0.5% sulfur on ships were adopted and took effect on March 1, 2020. These regulations subject ocean-going vessels to stringent emissions controls and may cause us to incur substantial costs. As of the date of this annual report, one of our vessels is equipped with a scrubber while our remaining vessels are not equipped with scrubbers and have transitioned to burning IMO compliant fuels.
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Sulfur content standards are even stricter within certain "Emission“Emission Control Areas,"Areas”, or ("ECAs"(“ECAs”). As of January 1, 2015, ships operating within an ECA were not permitted to use fuel with sulfur content in excess of 0.1% m/m. Amended Annex VI establishes procedures for designating new ECAs. Currently, the IMO has designated four ECAs, including specified portions of the Baltic Sea area, North Sea area, North American area and United States Caribbean area. Ocean-going vessels in these areas will beare subject to more stringent emission controls and may cause us to incur additional costs. Other areas in China are subject to local regulations that impose stricter emission controls. If other ECAs are approved by the IMO, or other new or more stringent requirements relating to emissions from marine diesel engines or port operations by vessels are adopted by the U.S. Environmental Protection Agency ("EPA"(“EPA”) or the statesother jurisdictions where we operate, compliance with these regulations could entail significant capital expenditures or otherwise increase the costs of our operations.
Amended Annex VI also establishes new tiers of stringent nitrogen oxide emissions standards for marine diesel engines, depending on their date of installation. At the MEPC meeting held from March to April 2014, amendments to Annex VI were adopted which address the date on which Tier III Nitrogen Oxide (NOx) standards in ECAs will go into effect. Under the amendments, Tier III NOx standards apply to ships that operate in the North American and U.S. Caribbean Sea ECAs designed for the control of NOx produced by vessels with a marine diesel engine installed and constructed on or after January 1, 2016. Tier III requirements could apply to areas that will be designated for Tier III NOx in the future. At MEPC 70 and MEPC 71, the MEPC approved the North Sea and Baltic Sea as ECAs for nitrogen oxide for ships built on or after January 1, 2021. The EPA promulgated equivalent (and in some sensesrespects stricter) emissions standards in 2010. As a result of these designations or similar future designations, we may be required to incur additional operating or other costs.
As determined at the MEPC 70, the new Regulation 22A of MARPOL Annex VI became effective as of March 1, 2018, and requires ships above 5,000 gross tonnage to collect and report annual data on fuel oil consumption to an IMO database, with the first year of data collection having commenced on January 1, 2019. The IMO intends to use such data as the first step in its roadmap (through 2023) for developing its strategy to reduce greenhouse gas emissions from ships, as discussed further below.
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As of January 1, 2013, MARPOL made mandatory certain measures relating to energy efficiency for ships. All ships are now required to develop and implement Ship Energy Efficiency Management Plans ("SEEMPS"(“SEEMPS”), and new ships must be designed in compliance with minimum energy efficiency levels per capacity mile as defined by the Energy Efficiency Design Index ("EEDI"(“EEDI”). Under these measures, by 2025, all new ships built will be 30% more energy efficient than those built in 2014. Additionally, MEPC 75 adopted amendments to MARPOL Annex VI which brings forward the effective date of the EEDI's "phase 3"EEDI’s “phase 3” requirements from January 1, 2025 to April 1, 2022 for several ship types, including gas carriers, general cargo ships, and LNG carriers.
Additionally, This may require us to incur additional operating or other costs. Further, MEPC 75 introduced draft amendments to Annex VI which impose new regulations to reduce greenhouse gas emissions from ships.  These amendments introduce requirements to assess and measure the energy efficiency of all ships and set the required attainment values, with the goal of reducing the carbon intensity of international shipping.  The requirements include (1) a technical requirement to reduce carbon intensity based on a new Energy Efficiency Existing Ship Index ("EEXI"), and (2) operational carbon intensity reduction requirements, based on a new operational carbon intensity indicator ("CII").  The attained EEXI is required to be calculated for ships of 400 gross tonnage and above, in accordance with different values set for ship types and categories.  With respect to the CII, the draft amendments would require ships of 5,000 gross tonnage to document and verify their actual annual operational CII achieved against a determined required annual operational CII.  Additionally, MEPC 75 proposed draft amendments requiring that, on or before January 1, 2023, all ships above 400 gross tonnage must have an approved SEEMP on board. For ships above 5,000 gross tonnage, the SEEMP would need to include certain mandatory content.  MEPC 75
In addition to the recently implemented emission control regulations, the IMO has been devising strategies to reduce greenhouse gases and carbon emissions from ships. According to its latest announcement, IMO plans to initiate measures to reduce CO2 emissions by at least 40% by 2030 and 70% by 2050 from the levels in 2008. It also approved draftplans to introduce measures to reduce GHG emissions by 50% by 2050 from the 2008 levels. These are likely to be achieved by setting energy efficiency requirements and encouraging ship owners to use alternative fuels such as biofuels, and electro-/synthetic fuels such as hydrogen or ammonia and may also include limiting the speed of the ships. However, there is still uncertainty regarding the exact measures that the IMO will undertake to achieve these targets. IMO-related uncertainty is also a factor discouraging ship owners from ordering newbuild vessels, as these vessels may have a high future environmental compliance costs.
In June 2021, IMO’s Marine Environment Protection Committee (“MEPC”) adopted amendments to MARPOL Annex IVI that will require ships to prohibitreduce their greenhouse gas emissions. These amendments combine technical and operational approaches to improve the useenergy efficiency of ships, also providing important building blocks for future GHG reduction measures. The new measures require the IMO to review the effectiveness of the implementation of the Carbon Intensity Indicator (“CII”) and carriage for use as fuel of heavy fuel oil ("HFO"Energy Efficiency Existing Ship Index (“EEXI”) requirements, by ships in Arctic waters on and after JulyJanuary 1, 2024.  The draft amendments introduced at MEPC 75 may be adopted2026 at the MEPC 76 session,latest. EEXI is a technical measure and will apply to ships above 400 GT. It indicates the energy efficiency of the ship compared to a baseline and is based on a required reduction factor (expressed as a percentage relative to the EEDI baseline). On the other hand, CII is an operational measure which specifies carbon intensity reduction requirements for vessels with 5,000 GT and above. The CII determines the annual reduction factor needed to ensure continuous improvement of the ship’s operational carbon intensity within a specific rating level. The operational carbon intensity rating would be held during 2021.given on a scale of A, B, C, D or E indicating a major superior, minor superior, moderate, minor inferior, or inferior performance level, respectively. The performance level would be recorded in the ship’s SEEMP. A ship rated D or E for three consecutive years would have to submit a corrective action plan to show how the required index (C or above) would be achieved. Further, the European Union has endorsed a binding target of at least 55% domestic reduction in economy wide GHG reduction by 2030 compared to 1990. The amendments to MARPOL Annex VI (adopted in a consolidated revised Annex VI) are expected to enter into force on November 1, 2022, with the requirements for EEXI and CII certification coming into effect from January 1, 2023. This means that the first annual reporting on carbon intensity will be completed in 2023, with the first rating given in 2024. EU shipowners including us are required to comply with this regulation.
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We may incur costs to comply with these revised standards. standards including introduction of new emissions software platform applications which will enable continuous monitoring of CIIs as well as automatic generation of CII reports, amendment of SEEMP part II plans and adoption and implementation of ISO 500001 procedures.Additional or new conventions, laws and regulations may be adopted that could require the installation of expensive emission control systems and could adversely affect our business, results of operations, cash flows, financial condition, and financial condition.operating results.
Safety Management System Requirements
The SOLAS Convention was amended to address the safe manning of vessels and emergency training drills. The Convention of Limitation of Liability for Maritime Claims (the "LLMC"“LLMC”) sets limitations of liability for a loss of life or personal injury claim, or a property claim against ship owners. We believe that our vessels are in substantial compliance with SOLAS and LLMC standards.
Under Chapter IX of the SOLAS Convention, or the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention (the "ISM Code"“ISM Code”), our operations are also subject to environmental standards and requirements. The ISM Code requires the party with operational control of a vessel to develop an extensive safety management system that includes, among other things, the adoption of a safety and environmental protection policy setting forth instructions and procedures for operating its vessels safely and describing procedures for responding to emergencies. We rely upon the safety management system that we and our technical management team have developed for compliance with the ISM Code. The failure of a vessel owner or bareboat charterer to comply with the ISM Code may subject such party to increased liability, may decrease available insurance coverage for the affected vessels and may result in a denial of access to, or detention in, certain ports.
The ISM Code requires that vessel operators obtain a safety management certificate for each vessel they operate. This certificate evidences compliance by a vessel'svessel’s management with the ISM Code requirements for a safety management system. No vessel can obtain a safety management certificate unless its manager has been awarded a document of compliance, issued by each flag state, under the ISM Code. We have obtained applicable documents of compliance for our offices and safety management certificates for our vessels for which the certificates are required by the IMO. The document of compliance and safety management certificate are renewed as required.
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Regulation II-1/3-10 of the SOLAS Convention governson goal-based ship construction standards for bulk carriers and oil tankers stipulates that ships over 150 meters in length must have adequate strength, integrity and stability to minimize risk of loss or pollution. Goal-based standards amendments in SOLAS regulation II-1/3-10 entered into force in 2012, with July 1, 2016 set for application to new oil tankers and bulk carriers. The SOLAS Convention regulation II-1/3-10 on goal-based ship construction standards for bulk carriers and oil tankers, which entered into force on January 1, 2012, requires that all oil tankers and bulk carriers of 150 meters in length and above, for which the building contract is placed on or after July 1, 2016, satisfy applicable structural requirements conforming to the functional requirements of the International Goal-based Ship Construction Standards for Bulk Carriers and Oil Tankers ("GBS Standards").
Amendments to the SOLAS Convention Chapter VII apply to vessels transporting dangerous goods and require those vessels be in compliance with the International Maritime Dangerous Goods Code ("(“IMDG Code"Code”). Effective January 1, 2018, the IMDG Code includes (1) updates to the provisions for radioactive material, reflecting the latest provisions from the International Atomic Energy Agency, (2) new marking, packing and classification requirements for dangerous goods, and (3) new mandatory training requirements. Amendments which took effect on January 1, 2020, also reflect the latest material from the UN Recommendations on the Transport of Dangerous Goods, including (1) new provisions regarding IMO type 9 tank, (2) new abbreviations for segregation groups, and (3) special provisions for carriage of lithium batteries and of vehicles powered by flammable liquid or gas.
The IMO has also adopted the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers ("STCW"(“STCW”). As of February 2017, all seafarers are required to meet the STCW standards and be in possession of a valid STCW certificate. Flag states that have ratified SOLAS and STCW generally employ the classification societies, which have incorporated SOLAS and STCW requirements into their class rules, to undertake surveys to confirm compliance.
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The IMO'sIMO’s Maritime Safety Committee and MEPC, respectively, each adopted relevant parts of the International Code for Ships Operating in Polar Water (the "Polar Code"“Polar Code”). The Polar Code, which entered into force on January 1, 2017, covers design, construction, equipment, operational, training, search and rescue as well as environmental protection matters relevant to ships operating in the waters surrounding the two poles. It also includes mandatory measures regarding safety and pollution prevention as well as recommendatory provisions. The Polar Code applies to new ships constructed after January 1, 2017, and afterfrom January 1, 2018, ships constructed before January 1, 2017, are required to meet the relevant requirements by the earlier of their first intermediate or renewal survey.
Furthermore, recent action by the IMO'sIMO’s Maritime Safety Committee and United States agencies indicates that cybersecurity regulations for the maritime industry are likely to be further developed in the near future in an attempt to combat cybersecurity threats. For example, cyber-risk management systems must be incorporated by ship-owners and managers by 2021. This might cause companies toCompanies may create additional procedures for monitoring cybersecurity in addition to those required by the IMO, which could require additional expenses and/or capital expenditures.
Fuel Regulations in Arctic Waters
MEPC 76 adopted amendments to MARPOL Annex I (addition of a new regulation 43A) to introduce a prohibition on the use and carriage for use as fuel of heavy fuel oil (HFO) by ships in Arctic waters on and after July 1, 2024. The impactprohibition will cover the use and carriage for use as fuel of such regulations is hardoils having a density at 15°C higher than 900 kg/m3 or a kinematic viscosity at 50°C higher than 180 mm2/s. Ships engaged in securing the safety of ships, or in search and rescue operations, and ships dedicated to predict at this time.oil spill preparedness and response would be exempted. Ships which meet certain construction standards with regard to oil fuel tank protection would need to comply on and after July 1, 2029.
Pollution Control and Liability Requirements
The IMO has negotiated international conventions that impose liability for pollution in international waters and the territorial waters of the signatories to such conventions. For example, the IMO adopted an International Convention for the Control and Management of Ships'Ships’ Ballast Water and Sediments (the "BWM Convention"“BWM Convention”) in 2004. The BWM Convention entered into force on September 8, 2017. The BWM Convention requires ships to manage their ballast water to remove, render harmless, or avoid the uptake or discharge of new or invasive aquatic organisms and pathogens within ballast water and sediments. The BWM Convention'sConvention’s implementing regulations call for a phased introduction of mandatory ballast water exchange requirements, to be replaced in time with mandatory concentration limits, and require all ships to carry a ballast water record book and an international ballast water management certificate.
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On December 4, 2013, the IMO Assembly passed a resolution revising the application dates of the BWM Convention so that the dates are triggered by the entry into force date and not the dates originally in the BWM Convention. This, in effect, makes all vessels delivered before the entry into force date "existing vessels"“existing vessels” and allows for the installation of ballast water management systems on such vessels at the first International Oil Pollution Prevention ("IOPP"(“IOPP”) renewal survey following entry into force of the convention. The MEPC adopted updated guidelines for approval of ballast water management systems (G8) at MEPC 70. At MEPC 71, the schedule regarding the BWM Convention'sConvention’s implementation dates was also discussed and amendments were introduced to extend the date existing vessels are subject to certain ballast water standards. Those changes were adopted at MEPC 72. Ships over 400 gross tons generally must comply with a "D-1“D-1 standard,"” requiring the exchange of ballast water only in open seas and away from coastal waters. The "D-2 standard"“D-2 standard” specifies the maximum amount of viable organisms allowed to be discharged, and compliance dates vary depending on the IOPP renewal dates. Depending on the date of the IOPP renewal survey, existing vessels must comply with the D-2 standard on or after September 8, 2019. For most ships, compliance with the D-2 standard will involve installing on-board systems to treat ballast water and eliminate unwanted organisms. Ballast water management systems, which include systems that make use of chemical, biocides, organisms or biological mechanisms, or which alter the chemical or physical characteristics of the Ballast Water, must be approved in accordance with IMO Guidelines (Regulation D-3). As of October 13, 2019, MEPC 72's72’s amendments to the BWM Convention took effect, making the Code for Approval of Ballast Water Management Systems, which governs assessment of ballast water management systems, mandatory rather than permissive, and formalized an implementation schedule for the D-2 standard. Under these amendments, all ships must meet the D-2 standard by September 8, 2024. CostsSignificant costs of compliancemay be incurred to comply with these regulations may be substantial.regulations. Additionally, in November 2020, MEPC 75 adopted amendments to the BWM Convention which would require a commissioning test of the ballast water management system for the initial survey or when performing an additional survey for retrofits. This analysis will not apply to ships that already have an installed BWM system certified under the BWM Convention. These amendments are expected to enter into force on June 1, 2022. To date, we have made $2.8 million in capital expenditures relating to the installation of BWMS on our vessels. For further information on these installations, see “—A—Fleet Development and Vessel Capital Expenditures.”
Once
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Mandatory mid-ocean exchange ballast water treatment requirements become mandatory under the BWM Convention may increase the cost of compliance could increase for ocean carriers and may have a material effect on our operations. However, many countries already regulate the discharge of ballast water carried by vessels from country to country to prevent the introduction of invasive and harmful species via such discharges. The U.S., for example, requires vessels entering its waters from another country to conduct mid-ocean ballast exchange, or undertake some alternate measure, and to comply with certain reporting requirements. Ballast water compliance requirements could adversely affect our business, results of operations, cash flows and financial condition.
The IMO also adopted the International Convention on Civil Liability for Bunker Oil Pollution Damage (the "Bunker Convention"“Bunker Convention”) to impose strict liability on ship owners (including the registered owner, bareboat charterer, manager or operator) for pollution damage in jurisdictional waters of ratifying states caused by discharges of bunker fuel. The Bunker Convention requires registered owners of ships over 1,000 gross tons to maintain insurance for pollution damage in an amount equal to the limits of liability under the applicable national or international limitation regime (but not exceeding the amount calculated in accordance with the LLMC). With respect to non-ratifying states, liability for spills or releases of oil carried as fuel in ship'sship’s bunkers typically is determined by the national or other domestic laws in the jurisdiction where the events or damages occur.
Ships are required to maintain a certificate attesting that they maintain adequate insurance to cover an incident. In jurisdictions, such as the United States where the CLC or the Bunker Convention has not been adopted, the Oil Pollution Act of 1990 along with various legislative schemes orand common law standards of conduct govern, and liability is imposed either on the basis of fault or on a strict-liability basis.
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Anti‑Fouling Requirements
In 2001, the IMO adopted the International Convention on the Control of Harmful Anti‑fouling Systems on Ships or the "Anti‑(the “Anti‑fouling Convention"Convention”). The Anti‑fouling Convention, which entered into force on September 17, 2008, prohibits the use of organotin compound coatings to prevent the attachment of mollusks and other sea life to the hulls of vessels. Vessels of over 400 gross tons engaged in international voyages willare also be required to undergo an initial survey before the vessel is put into service or before an International Anti‑fouling System Certificate is issued for the first time; and subsequent surveys when the anti‑fouling systems are altered or replaced.
In November 2020,June 2021, MEPC 75 approved draft76 adopted amendments to the Anti-fouling Convention to prohibit the use of biocide cybutryne contained in anti-fouling systems, containing cybutryne, which would apply to ships from January 1, 2023, or, for ships already bearing such an anti-fouling system, at the next scheduled renewal of the system after that date, but no later than 60 months following the last application to the ship of such a system.  These amendments may be formally adopted at MEPC 76 in 2021.system, as studies have proven that the substance is harmful to a variety of marine organisms.
We have obtained Anti‑fouling System Certificates for our vessels that are subject to the Anti‑fouling Convention.
Compliance Enforcement
Noncompliance with the ISM Code or other IMO regulations may subject the ship owner or bareboat charterer to increased liability, may lead to decreases in available insurance coverage for affected vessels and may result in the denial of access to, or detention in, some ports. The USCG and European Union authorities have indicated that vessels not in compliance with the ISM Code by applicable deadlines will be prohibited from trading in U.S. and European Union ports, respectively. As of the date of this report, we confirm our vessels are ISM Code certified through Pavimar, that technically operatesthe technical operator of our vessels. The technical managers have obtained the documentdocuments of compliance in order to operate the vesselvessels in accordance with the ISM Code.Code and the Anti-fouling Convention. However, there can be no assurance that such certificates will be maintained in the future.future. The IMO continues to review and introduce new regulations. It is impossible to predict what additional regulations, if any, may be passed by the IMO and what effect, if any, such regulations might have on our operations.
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United States Regulations
The U.S. Oil Pollution Act of 1990 and the Comprehensive Environmental Response, Compensation and Liability Act
The U.S. Oil Pollution Act of 1990 ("OPA"(“OPA”) established an extensive regulatory and liability regime for the protection and cleanup of the environment from oil spills. OPA affects all "owners“owners and operators"operators” whose vessels trade or operate within the U.S., its territories and possessions or whose vessels operate in U.S. waters, which includes the U.S.'s’s territorial sea and its 200 nautical mile exclusive economic zone around the U.S. The U.S. has also enacted the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"(“CERCLA”), which applies to the discharge of hazardous substances other than oil, except in limited circumstances, whether on land or at sea. OPA and CERCLA both define "owner“owner and operator"operator” in the case of a vessel as any person owning, operating or chartering by demise, the vessel. Both OPA and CERCLA impact our operations.
Under OPA, vessel owners and operators are "responsible parties"“responsible parties” and are jointly, severally and strictly liable (unless the spill results solely from the act or omission of a third party, an act of God or an act of war) for all containment and clean-up costs and other damages arising from discharges or threatened discharges of oil from their vessels, including bunkers (fuel). OPA defines these other damages broadly to include:
(i)  injury to, destruction or loss of, or loss of use of, natural resources and related assessment costs;
(ii)  injury to, or economic losses resulting from, the destruction of real and personal property;
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(iii) loss of subsistence use of natural resources that are injured, destroyed or lost;
(iv)  net loss of taxes, royalties, rents, fees or net profit revenues resulting from injury, destruction or loss of real or personal property, or natural resources;
(v)  lost profits or impairment of earning capacity due to injury, destruction or loss of real or personal property or natural resources; and
(vi)  net cost of increased or additional public services necessitated by removal activities following a discharge of oil, such as protection from fire, safety or health hazards, and loss of subsistence use of natural resources.
OPA contains statutory caps on liability and damages; such caps do not apply to direct cleanup costs. Effective December 12, 2019, the USCG adjusted the limits of OPA liability for non-tank vessels, edible oil tank vessels, and any oil spill response vessels, to the greater of $1,200 per gross ton or $997,100 (subject to periodic adjustment for inflation). These limits of liability do not apply if an incident was proximately caused by the violation of an applicable U.S. federal safety, construction or operating regulation by a responsible party (or its agent, employee or a person acting pursuant to a contractual relationship), or a responsible party'sparty’s gross negligence or willful misconduct. The limitation on liability similarly does not apply if the responsible party fails or refuses to (i) report the incident as required by law where the responsible party knows or has reason to know of the incident; (ii) reasonably cooperate and assist as requested in connection with oil removal activities; or (iii) without sufficient cause, comply with an order issued under the Federal Water Pollution Act (Section 311 (c), (e)) or the Intervention on the High Seas Act.
CERCLA contains a similar liability regime whereby owners and operators of vessels are liable for cleanup, removal and remedial costs, as well as damages for injury to, or destruction or loss of, natural resources, including the reasonable costs associated with assessing the same, and health assessments or health effects studies. There is no liability if the discharge of a hazardous substance results solely from the act or omission of a third party, an act of God or an act of war. Liability under CERCLA is limited to the greater of $300 per gross ton or $5.0 million for vessels carrying a hazardous substance as cargo and the greater of $300 per gross ton or $500,000 for any other vessel. These limits do not apply (rendering the responsible person liable for the total cost of response and damages) if the release or threat of release of a hazardous substance resulted from willful misconduct or negligence, or the primary cause of the release was a violation of applicable safety, construction or operating standards or regulations. The limitation on liability also does not apply if the responsible person fails or refused to provide all reasonable cooperation and assistance as requested in connection with response activities where the vessel is subject to OPA.
OPA and CERCLA each preserve the right to recover damages under existing law, including maritime tort law. OPA and CERCLA both require owners and operators of vessels to establish and maintain with the USCG evidence of financial responsibility sufficient to meet the maximum amount of liability to which the particular responsible person may be subject. Vessel owners and operators may satisfy their financial responsibility obligations by providing a proof of insurance, a surety bond, qualification as a self-insurer or a guarantee. We comply and plan to be in compliance going forward with the USCG'sUSCG’s financial responsibility regulations by providing applicable certificates of financial responsibility.
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The 2010 Deepwater Horizon oil spill in the Gulf of Mexico resulted in additional regulatory initiatives or statutes, including higher liability caps under OPA, new regulations regarding offshore oil and gas drilling, and a pilot inspection program for offshore facilities. However, severalSeveral of these initiatives and regulations have been or may be revised. For example, the U.S. Bureau of Safety and Environmental Enforcement's ("BSEE"Enforcement’s (“BSEE”) revised Production Safety Systems Rule ("PSSR"(“PSSR”), effective December 27, 2018, modified and relaxed certain environmental and safety protections under the 2016 PSSR. Additionally, the BSEE amended the Well Control Rule, effective July 15, 2019, which rolled back certain reforms regarding the safety of drilling operations, and former U.S. Presidentthe Trump administration had proposed leasing new sections of U.S. waters to oil and gas companies for offshore drilling. The effects of these proposals and changes are currently unknown, and recently, current U.S. Presidentthe Biden signedadministration issued an executive order temporarily blocking new leases for oil and gas drilling in federal waters. While a U.S. federal court has since granted an injunction against this executive order, the sale of a large number of previously auctioned oil and gas leases in the Gulf of Mexico has recently been blocked by another U.S. federal court. The U.S. Department of Justice is currently appealing the injunction against the executive order. Compliance with any new requirements of OPA and future legislation or regulations applicable to the operation of our vessels could impact the cost of our operations and adversely affect our business.
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OPA specifically permits individual states to impose their own liability regimes with regard to oil pollution incidents occurring within their boundaries, provided they accept, at a minimum, the levels of liability established under OPA and some states have enacted legislation providing for unlimited liability for oil spills. Many U.S. states that border a navigable waterway have enacted environmental pollution laws that impose strict liability on a person for removal costs and damages resulting from a discharge of oil or a release of a hazardous substance. TheseSome of these laws may beare more stringent than U.S. federal law.law in some respects. Moreover, some states have enacted legislation providing for unlimited liability for discharge of pollutants within their waters, although in some cases, states which have enacted this type of legislation have not yet issued implementing regulations defining tanker owners'owners’ responsibilities under these laws. The Company intends to be in compliance with all applicable state regulations in the relevant ports where the Company'sCompany’s vessels call.
We currently maintain pollution liability coverage insurance in the amount of $1.0 billion per incident for our vessels. If the damages from a catastrophic spill were to exceed our insurance coverage, it could have an adverse effect on our business and results of operations.operating results.
Other United States Environmental Initiatives
The U.S. Clean Air Act of 1970 (including its amendments of 1977 and 1990) ("CAA"(“CAA”) requires the EPA to promulgate standards applicable to emissions of greenhouse gasses, volatile organic compounds and other air contaminants. The CAA requires states to adopt State Implementation Plans, or "SIPs," some of which regulate emissions resulting from vessel loading and unloading operations which may affect our Vessel.vessels.
The U.S. Clean Water Act ("CWA"(“CWA”) prohibits the discharge of oil, hazardous substances and ballast water in U.S. navigable waters unless authorized by a duly-issuedduly issued permit or exemption and imposes strict liability in the form of penalties for any unauthorized discharges. The CWA also imposes substantial liability for the costs of removal, remediation and damages and complements the remedies available under OPA and CERCLA. In 2015, the EPA expanded the definition of "waters of the United States" ("WOTUS"), thereby expanding federal authority under the CWA. Following litigation on the revised WOTUS rule, in December 2018, the EPA and Department of the Army proposed a revised, limited definition of "waters of the United States". The proposed rule was published in the Federal Register on February 14, 2019 and was subject to public comment. On October 22, 2019, the agencies published a final rule repealing the 2015 Rule defining "waters of the United States" and recodified the regulatory text that existed prior to the 2015 Rule. The final rule became effective on December 23, 2019. On January 23, 2020, the EPA published the "Navigable Waters Protection Rule," which replaces the rule published on October 22, 2019, and redefines "waters of the United States". This rule became effective on June 22, 2020, although the effective date has been stayed in at least one U.S. state pursuant to court order. The effect of this rule is currently unknown.
The EPA and the USCG have also enacted rules relating to ballast water discharge, compliance with which requires the installation of equipment on our vessels to treat ballast water before it is discharged or the implementation of other port facility disposal arrangements or procedures at potentially substantial costs, and/or otherwise restrict our vessels from entering U.S. Waters.waters. The EPA will regulate these ballast water discharges and other discharges incidental to the normal operation of certain vessels within United States waters pursuant to the Vessel Incidental Discharge Act ("VIDA"(“VIDA”), which was signed into law on December 4, 2018 and replaces the 2013 Vessel General Permit ("VGP"(“VGP”) program (which authorizes discharges incidental to operations of commercial vessels and contains numeric ballast water discharge limits for most vessels to reduce the risk of invasive species in U.S. waters, stringent requirements for exhaust gas scrubbers, and requirements for the use of environmentally acceptable lubricants) and current Coast Guard ballast water management regulations adopted under the U.S. National Invasive Species Act, ("NISA"), such as mid-ocean ballast exchange programs and installation of approved USCG technology for all vessels equipped with ballast water tanks bound for U.S. ports or entering U.S. waters. VIDA establishes a new framework for the regulation of vessel incidental discharges under Clean Water Act (CWA),the CWA, requires the EPA to develop performance standards for those discharges within two years of enactment, and requires the U.S. Coast Guard to develop implementation, compliance, and enforcement regulations within two years of EPA'sEPA’s promulgation of standards. Under VIDA, all provisions of the 2013 VGP and USCG regulations regarding ballast water treatment remain in force and effect until the EPA and U.S. Coast Guard regulations are finalized. Non-military, non-recreational vessels greater than 79 feet in length must continue to comply with the requirements of the VGP, including submission of a Notice of Intent ("NOI"(“NOI”) or retention of a PARI form and submission of annual reports. We have submitted NOIs for our vessels where required. Compliance with the EPA, U.S. Coast Guard and state regulations could require the installation of ballast water treatment equipment on our vessels which have not already installed onethis equipment or the implementation of other port facility disposal procedures as a result of which we may incur additional capital expenditures or may otherwise have to restrict certain of our vessels from entering U.S. waters.
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European Union Regulations
In October 2009, the European Union amended a directive to impose criminal sanctions for illicit ship-source discharges of polluting substances, including minor discharges, if committed with intent, recklessly or with serious negligence and the discharges individually or in the aggregate result in deterioration of the quality of water. Aiding and abetting the discharge of a polluting substance may also lead to criminal penalties. The directive applies to all types of vessels, irrespective of their flag, but certain exceptions apply to warships or where human safety or that of the ship is in danger. Criminal liability for pollution may result in substantial penalties or fines and increased civil liability claims. Regulation (EU) 2015/757 of the European Parliament and of the Council of 29 April 2015 (amending EU Directive 2009/16/EC) governs the monitoring, reporting and verification of carbon dioxide emissions from maritime transport, and, subject to some exclusions, requires companies with ships over 5,000 gross tonnage to monitor and report carbon dioxide emissions annually, which may cause us to incur additional expenses.
The European Union has adopted several regulations and directives requiring, among other things, more frequent inspections of high-risk ships, as determined by type, age, and flag as well as the number of times the ship has been detained. The European Union also adopted and extended a ban on substandard ships and enacted a minimum ban period and a definitive ban for repeated offenses. The regulation also provided the European Union with greater authority and control over classification societies, by imposing more requirements on classification societies and providing for fines or penalty payments for organizations that failed to comply. Furthermore, the EU has implemented regulations requiring vessels to use reduced sulfur content fuel for their main and auxiliary engines. The EU Directive 2005/33/EC (amending Directive 1999/32/EC) introduced requirements parallel to those in MARPOL Annex VI relating to the sulfur content of marine fuels. In addition, the EU imposed a 0.1% maximum sulfur requirement for fuel used by ships at berth in the Baltic, the North Sea and the English Channel (the so called "SOx-Emission“SOx-Emission Control Area"Area”). As of January 2020, EU member states must also ensure that ships in all EU waters, except the SOx-Emission Control Area, use fuels with a 0.5% maximum sulfur content.
On September 15, 2020, the European Parliament voted to include greenhouse gas emissions from the maritime sector in the European Union'sUnion’s carbon market from 2022.market. This will require shipowners to buy permits to cover these emissions. Contingent on another formal approval vote, specific regulations are forthcoming and are expectedOn 14 July 2021, the EU Commission proposed legislation to amend the European Union Emissions Trading Scheme (“EU ETS”) to include shipping emissions which would be proposed by 2021.phased in beginning in 2023.
International Labour Organization
The International Labour Organization (the "ILO") is a specialized agency of the UN that has adopted the Maritime Labor Convention 2006 ("(“MLC 2006"2006”). A Maritime Labor Certificate and a Declaration of Maritime Labor Compliance is required to ensure compliance with the MLC 2006 for all ships that are 500 gross tonnage or over and are either engaged in international voyages or flying the flag of a Member and operating from a port, or between ports, in another country. We believe that ourOur vessels are in substantial compliance with and are certified as per MLC 2006 and, we believe, in substantial compliance with the MLC 2006.
Greenhouse Gas Regulation
Currently, the emissions of greenhouse gases from international shipping are not subject to the Kyoto Protocol to the United Nations Framework Convention on Climate Change, which entered into force in 2005 and pursuant to which adopting countries have been required to implement national programs to reduce greenhouse gas emissions with targets extended through 2020. International negotiations are continuing with respect to a successor to the Kyoto Protocol, and restrictions on shipping emissions may be included in any new treaty. In December 2009, more than 27 nations, including the U.S. and China, signed the Copenhagen Accord, which includes a non-binding commitment to reduce greenhouse gas emissions. The 2015 United Nations Climate Change Conference in Paris resulted in the Paris Agreement, which entered into force on November 4, 2016 and does not directly limit greenhouse gas emissions from ships. The U.S. initially entered into the agreement, but on June 1, 2017, former U.S. Presidentthe Trump administration announced that the United States intendsintended to withdraw from the Paris Agreement, and the withdrawal became effective on November 4, 2020. On January 20, 2021, U.S. President Biden signed an executive order to rejoin the Paris Agreement, which took effect on February 19, 2021.
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At MEPC 70 and MEPC 71, a draft outline of the structure of the initial strategy for developing a comprehensive IMO strategy on reduction of greenhouse gas emissions from ships was approved. In accordance with this roadmap, in April 2018, nations at the MEPC 72 adopted an initial strategy to reduce greenhouse gas emissions from ships. The initial strategy identifies "levels“levels of ambition"ambition” to reducing greenhouse gas emissions, including (1) decreasing the carbon intensity from ships through implementation of further phases of the EEDI for new ships; (2) reducing carbon dioxide emissions per transport work, as an average across international shipping, by at least 40% by 2030, pursuing efforts towards 70% by 2050, compared to 2008 emission levels; and (3) reducing the total annual greenhouse emissions by at least 50% by 2050 compared to 2008 while pursuing efforts towards phasing them out entirely. The initial strategy notes that technological innovation, alternative fuels and/or energy sources for international shipping will be integral to achieve the overall ambition. The MEPC 76 adopted amendments to MARPOL Annex VI that will require ships to reduce their greenhouse gas emissions. These amendments combine technical and operational approaches to improve the energy efficiency of ships, in line with the targets established in the 2018 Initial IMO Strategy for Reducing GHG Emissions from Ships and provide important building blocks for future GHG reduction measures. The new measures will require all ships to calculate their EEXI following technical means to improve their energy efficiency and to establish their annual operational carbon intensity indicator (CII) and CII rating. Carbon intensity links the GHG emissions to the transport work of ships. These regulations could cause us to incur additional substantial expenses.
The EU made a unilateral commitment to reduce overall greenhouse gas emissions from its member states fromby 20% of 1990 levels by 2020. The EU also committed to reduce its emissions by 20% under the Kyoto Protocol'sProtocol’s second period from 2013 to 2020. Starting in January 2018, large ships over 5,000 gross tonnage calling at EU ports are required to collect and publish data on carbon dioxide emissions and other information. As previously discussed, implementation of regulations relating to the inclusion of greenhouse gas emissions from the maritime sector in the European Union'sUnion’s carbon market areis also forthcoming.
In the United States, the EPA issued a finding that greenhouse gases endanger the public health and safety, adopted regulations to limit greenhouse gas emissions from certain mobile sources, and proposed regulations to limit greenhouse gas emissions from large stationary sources. However, in March 2017, former U.S. President Trump signed an executive order to review and possibly eliminate the EPA'selements of EPA’s plan to cut greenhouse gas emissions and in August 2019, the Administration announced plans to weaken regulations for methane emissions and on August 13, 2020, the EPA releasedemissions. Subsequent rules rollingrolled back standards to control methane and volatile organic compound emissions from new oil and gas facilities. However, U.S. Presidentthe Biden administration recently directed the EPA to publish a proposed rulerules suspending, revising, or rescinding certain of these rules.regulations. The EPA or individual U.S. states could enact additional environmental regulations that would affect our operations.
Any passage of climate control legislation or other regulatory initiatives by the IMO, the EU, the U.S. or other countries where we operate, or any treaty adopted at the international level to succeed or further implement the Kyoto Protocol or Paris Agreement thatwhich further restricts emissions of greenhouse gases could require us to make significant financial expenditures which we cannot predict with certainty at this time. Even in the absence of climate control legislation, our business may be indirectly affected to the extent that climate change may resultresults in sea level changes or certainincreases in extreme weather events.
Vessel Security Regulations
Since the terrorist attacks of September 11, 2001 in the United States, there have been a variety of initiatives intended to enhance vessel security such as the U.S. Maritime Transportation Security Act of 2002 ("MTSA"(“MTSA”). To implement certain portions of the MTSA, the USCG issued regulations requiring the implementation of certain security requirements aboard vessels operating in waters subject to the jurisdiction of the United States and at certain ports and facilities, some of which are regulated by the EPA.
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Similarly, Chapter XI-2 of the SOLAS Convention imposes detailed security obligations on vessels and port authorities and mandates compliance with the International Ship and Port Facility Security Code ("(“the ISPS Code"Code”). The ISPS Code is designed to enhance the security of ports and ships against terrorism. To trade internationally, a vessel must attain an International Ship Security Certificate ("ISSC"(“ISSC”) from a recognized security organization approved by the vessel'svessel’s flag state. Ships operating without a valid certificate may be detained, expelled from, or refused entry at port until they obtain an ISSC. The various requirements, some of which are found in the SOLAS Convention, include, for example, on-board installation of automatic identification systems to provide a means for the automatic transmission of safety-related information from among similarly equipped ships and shore stations, including information on a ship'sship’s identity, position, course, speed and navigational status; on-board installation of ship security alert systems, which do not sound on the vessel but only alert the authorities on shore; the development of vessel security plans; ship identification number to be permanently marked on a vessel'svessel’s hull; a continuous synopsis record kept onboard showing a vessel'svessel’s history including the name of the ship, the state whose flag the ship is entitled to fly, the date on which the ship was registered with that state, the ship'sship’s identification number, the port at which the ship is registered and the name of the registered owner(s) and their registered address; and compliance with flag state security certification requirements.
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The USCG regulations, intended to align with international maritime security standards, exempt non-U.S. vessels from MTSA vessel security measures, provided such vessels have on board a valid ISSC that attests to the vessel'svessel’s compliance with the SOLAS Convention security requirements and the ISPS Code. Future security measures could have a significant financial impact on us. We intend to comply with the various security measures addressed by MTSA, the SOLAS Convention and the ISPS Code.
The cost of vessel security measures has also been affected by the escalation in the frequency of acts of piracy against ships, notably off the coast of Somalia includingin the Gulf of Aden and Arabian Sea area.off the coast of Nigeria in the Gulf of Guinea. Substantial loss of revenue and other costs may be incurred as a result of detention of a vessel or additional security measures, and the risk of uninsured losses could significantly affecthave a material adverse effect on our business.business, liquidity and operating results. Costs are incurred in taking additional security measures in accordance with Best Management Practices to Deter Piracy, notably those contained in the BMP5 industry standard.
Inspection by Classification Societies
The hull and machinery of every commercial vessel must be classed by a classification society authorized by its country of registry. The classification society certifies that a vessel is safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of the vessel and SOLAS. Most insurance underwriters make it a condition for insurance coverage and lending that a vessel be certified "in class"“in class” by a classification society which is a member of the International Association of Classification Societies, the IACS. The IACS has adopted harmonized Common Structural Rules, or the Rules, which apply to oil tankers and bulk carriers contracted for construction on or after July 1, 2015. The Rules attempt to create a level of consistency between IACS Societies. Our vessels are certified as being "in class"“in class” by the applicable IACS Classification Societies (e.g., American Bureau of Shipping, Lloyd'sLloyd’s Register of Shipping, Nippon Kaiji Kyokai etc.).
A vessel must undergo annual surveys, intermediate surveys, dry-dockings and special surveys. In lieu of a special survey, a vessel'svessel’s machinery may be on a continuous survey cycle, under which the machinery would be surveyed periodically over a five-year period. Every vessel is also required to be dry-docked every 30 to 36 months for inspection of the underwater parts of the vessel. If any vessel does not maintain its class and/or fails any annual survey, intermediate survey, dry-docking or special survey, the vessel will be unable to carry cargo between ports and will be unemployable and uninsurable which could cause us to be in violation of certain covenants in our loan agreements. Any such inability to carry cargo or be employed, or any such violation of covenants, could have a material adverse impact on our financial condition and results of operations.operating results.
Risk of Loss and Liability Insurance
General
The operation of any cargo vessel includes risks such as mechanical failure, physical damage, collision, property loss, cargo loss or damage and business interruption due to political circumstances in foreign countries, piracy incidents, hostilities and labor strikes. In addition, there is always an inherent possibility of marine disaster, including oil spills and other environmental mishaps,events, and the liabilities arising from owning and operating vessels in international trade. OPA, which imposes virtually unlimited liability upon shipowners, operators and bareboat charterers of any vessel trading in the exclusive economic zone of the United States for certain oil pollution accidents in the United States, has made liability insurance more expensive for shipowners and operators trading in the United States market. We carry insurance coverage as customary in the shipping industry. However, not all risks can be insured, specific claims may be rejected, and we might not be always able to obtain adequate insurance coverage at reasonable rates. Any of these occurrences could have a material adverse effect on the business.
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Hull and Machinery Insurance
We procure hull and machinery insurance, protection and indemnity insurance, which includes environmental damage and pollution insurance and war risk insurance and freight, demurrage and defense insurance for our Fleet.fleet. We generally do not maintain insurance against loss of hire, which covers business interruptions that result in the loss of use of a vessel.
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Protection and Indemnity Insurance
Protection and indemnity insurance is provided by mutual protection and indemnity associations, or "P“P&I Associations,"Associations” or clubs, and covers our third-party liabilities in connection with our shipping activities. This includes third-party liability and other related expenses of injury or death of crew, passengers and other third parties, loss or damage to cargo, claims arising from collisions with other vessels, damage to other third-party property, pollution arising from oil or other substances, and salvage, towing and other related costs, including wreck removal. Protection and indemnity insurance is a form of mutual indemnity insurance, extended by protection and indemnity mutual associations, or "clubs".
Our current protection and indemnity insurance coverage for pollution is $1 billion per vessel per incident. TheThere are 13 P&I Associations that comprise the International Group“International Group”, a group of P&I Associations that insure approximately 90% of the world'sworld’s commercial tonnage and have entered into a pooling agreement to reinsure each association'sassociation’s liabilities. The International Group'sGroup’s website states that the Poolpool provides a mechanism for sharing all claims in excess of US$ 10 million up to, currently, approximately US$ 3.1 billion. As a member of a P&I Association, which is a member of the International Group, we are subject to calls payable to the associations based on our claim records as well as the claim records of all other members of the individual associations and members of the shipping pool of P&I Associations comprising the International Group.
Competition
We operate in markets that are highly competitive. The process of obtaining new employment for our Fleetfleet generally involves intensive screening, and competitive bidding, and often extends for several months. We compete for charters on the basis of price, vessel location, size, age and condition of the vessel, as well as on our reputation as an owner and operator. Demand for dry bulk and Aframax/LR2 and Handysize tanker vessels fluctuates in line with the main patterns of trade of the major dry bulk and Aframax/LR2 and Handysize tanker cargoes and varies according to their supply and demand. Ownership of dry bulk and tanker vessels is highly fragmented.
Permits and Authorizations
We are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses and certificates with respect to our vessels. The kinds of permits, licenses and certificates required depend upon several factors, including the commodity transported, the waters in which the vessel operates, the nationality of the vessel'svessel’s crew and the age of a vessel. We have been able to obtain all permits, licenses and certificates currently required to permit our vessels to operate. Additional laws and regulations, environmental or otherwise, may be adopted which could limit our ability to do business or increase our cost of doing business.
Seasonality
Demand for vessel capacityour dry bulk vessels, Handysize tanker vessels and Aframax/LR2 tanker vessels has historically exhibited seasonal variations  and, as a result, fluctuations in charter rates. This seasonalityThese variations may result in quarter-to-quarter volatility in our operating results for the vessels in our vesselsthree business segments when trading in the spot trip or voyage charter market or if on period time charter when a new time charter is being entered into. The dry bulk sector is typically stronger in the fall and winter months in anticipation of increased consumption of coal and other raw materials in the northern hemisphere. The tanker sector is typically stronger in the fall and winter months in anticipation of increased consumption of oil and petroleum products in the northern hemisphere during the winter months. Seasonality in the sectors in which we operate could materially affect our operating results and cash flows.

C.Organizational Structure
We were incorporated in the Republic of the Marshall Islands in September 2017, with our principal executive offices located at 223 Christodoulou Chatzipavlou Street, Hawaii Royal Gardens, 3036 Limassol, Cyprus. A list of our subsidiaries is filed as Exhibit 8.1 to this annual report on Form 20-F.
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D.Property, Plants and Equipment
We own no properties other than our vessels. For a description of our Fleet,fleet, please see "Item“Item 4. Information on the Company—B. Business Overview—Our Fleet".Fleet.”
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ITEM 4A.
UNRESOLVED STAFF COMMENTS
None.

ITEM 5.OPERATING AND FINANCIAL REVIEW AND PROSPECTS
Introduction
The following discussion provides a review of the performance of our operations and compares our performance with that of the preceding year. All dollar amounts referred to in this discussion and analysis are expressed in United States dollars except where indicated otherwise.
In September 2019, we changed our fiscal year end from September 30 to December 31. This change in our fiscal year end resulted in a three-month transition period from October 1, 2018 to December 31, 2018.
For a discussion of our results for the year ended December 31, 20192020, compared to the year ended December 31, 2018,2019, please see "Item 5 – Operating and Financial Review and Prospects – “—A. Operating Results – Year ended December 31, 20192020 as compared to year ended December 31, 2018" 2019” contained in our annual report on Form 20-F for the year ended December 31, 2019,2020, filed with the Securities and Exchange CommissionSEC on March 31, 2020.30, 2021.
The Company'sCompany’s business could be materially and adversely affected by the risks, or the public perception of the risks related to the COVID-19 pandemic. The following discussion of the results of our operations and our financial condition should be read in conjunction with the financial statements and the notes to those statements included in "Item“Item 18. Financial Statements".Statements.” This discussion contains forward-looking statements that involve risks, uncertainties, and assumptions. See “Cautionary Statement Regarding Forward-Looking Statements.” Actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth in "Item“Item 3. Key Information—D. Risk Factors".Factors.”
A.Operating Results
During 2021, we acquired a number of tanker vessels for the first time. As a result of the different characteristics of the Aframax/LR2 tanker vessels and the Handysize tanker vessels acquired, we determined that, with effect from the fourth quarter of 2021, we operated in three reportable segments: (i) dry bulk, (ii) Aframax/LR2 tanker and (ii) Handysize tanker. The reportable segments reflect the internal organization of the Company and the way the chief operating decision maker reviews the operating results and allocates capital within the Company. In addition, the transport of dry cargo commodities, which are carried by dry bulk vessels, has different characteristics to the transport of crude oil (carried by Aframax/LR2 tankers) and differs again from the transport of oil products (carried by Handysize tanker vessels). Further, dry bulk vessels trade on different types of charter contracts as compared to tanker vessels, predominantly being employed in the time charter market, whereas our tanker vessels participate in the voyage charter market and in pooling agreements. The transportation of crude oil also has different characteristics to the transportation of oil products in terms of trading routes and cargo handling.
Principal factors impacting our business, results of operations and financial condition
Our results of operations are affected by numerous factors. The principal factors that have impacted the business during the fiscal periods presented in the following discussion and analysis and that are likely to continue to impact our business are the following:

-		‒
The levels of demand and supply of seaborne cargoes and vessel tonnage in the dry bulk and tanker shipping industries;

‒-The cyclical nature of the shipping industry in general and its impact on charter rates and vessel values;values;

-		‒Utilization rates
The successful implementation of the Company’s growth business strategy, including our ability to obtain equity and debt financing at acceptable and attractive terms to fund future capital expenditures and/or to implement our Fleet;business strategy;

-		‒The global economic growth outlook and trends;
-
Economic, regulatory, political and governmental conditions that affect shipping and the dry-bulk and tanker industries;
-The employment and operation of our Fleet;fleet including the utilization rates of our vessels;

-		‒
Our ability to successfully employ our vessels at economically attractive rates and our strategic decisions regarding the employment mix of our fleet in the time, voyage, and pool charter markets, as our charters expire or are otherwise terminated;
-Management of the financial, general and administrative elements involved in the conduct of our business and ownership of our Fleet;

‒The age, conditionfleet, including the effective and specificationsefficient technical management of our vessels;fleet by our head and sub-managers, and their suppliers;
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-		‒
The number of charterers who use our services and the performance of our charterers'their charterers’ obligations under their charter agreements;agreements, including ’their ability to make timely charter payments to us;

-		‒
Our ability to maintain solid working relationships with our existing charterers and our ability to increase the number of our charterers through the development of new working relationships;

-		‒
The effectivevetting approvals by oil majors of our commercial and efficienttechnical managers for the management of our Fleet by Castor Ships and Pavimar;tanker vessels;
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‒Economic, regulatory, political and governmental conditions that affect shipping and the dry bulk and tanker industries;

‒-Dry-docking and special survey days,costs and duration, both expected and unexpected;

-		‒Our ability to successfully employ our vessels at economically attractive rates and our strategic decisions regarding the employment mix
The level of any distribution on all classes of our Fleet inshares;
-
Our borrowing levels and the voyage marketfinance costs related to our outstanding debt as well as periodour compliance with our debt covenants; and trip time charter markets, as our charters expire or are otherwise terminated;

-		‒Performance of our counterparties, including our charterers ability to make charter payments to us;

‒Our ability to obtain equity and debt financing at acceptable and attractive terms to fund future capital expenditures;

‒
Management of our financial resources, including banking relationships and of the relationships with our various stakeholders;

‒Our access to capital required to acquire additional ships and/or to implement our business strategy; and

‒The level of dividends on all classes of our shares, if any.stakeholders;
-
Major outbreaks of diseases (such as COVID-19) and governmental responses thereto.
Hire Rates and Cyclical Nature of the Industry
One of the factors that impacts our profitability is the hire rates at which we are able to fix our vessels. The shipping industry is cyclical with attendant volatility in charter hire rates and, as a result, profitability. The dry bulk and tanker sectors have both been characterized by long and short periods of imbalances between supply and demand, causing charter rates to be volatile.
The degree of charter rate volatility among different types of dry bulk and tanker vessels has varied widely, and charter rates for these vessels have also varied significantly in recent years. Fluctuations in charter rates result from changes in the supply and demand for vessel capacity and changes in the supply and demand for the major commodities carried by ocean going vessels internationally. The factors and the nature, timing, direction and degree of changes in industry conditions affecting the supply and demand for vessels are unpredictable to a great extent and outside our control. That being said, the nature, timing, direction and degree of changes in industry conditions are also unpredictable.


Our vessel deployment strategy seeks to maximize charter revenue throughout industry cycles while maintaining cash flow stability and foreseeability. Our gross revenues for the year ended December 31, 2020,2021, consisted of hire earned under time charter contracts, where charterers pay a fixed daily hire, and other minor compensation costs related to the contracts. In the future, our revenues may also consist of amounts earnedcontracts (such as ballast positioning compensation, holds cleaning compensation, etc.), revenue under voyage charter contracts, where charterers pay a fixed amount per ton of cargo carried. carried, and pool revenue for our Handysize tanker vessels and one of our Aframax/LR2 tanker vessels. Pooling arrangements aggregate vessels of similar types and sizes under a central administration, which are marketed as a single entity and for which revenues are pooled and distributed to owners based on an agreed key. Pools employ experienced commercial charterers and operators who have close working relationships with customers and brokers, while technical management is separate from pool operations. Pools negotiate charters with customers primarily in the spot market but may also arrange time charter agreements. The size and scope of these pools enable them to enhance utilization rates for pool vessels by securing backhaul voyages and contract of affreightment, generating higher revenues than otherwise might be obtainable in the spot market. We believe that pooling arrangements offer our customers greater flexibility and a higher level of service, while achieving scheduling efficiencies.
Our future gross revenues may be affected by the proportion of voyage and time charters, sinceand pool revenues. See Note 12 to our consolidated financial statements included elsewhere in this annual report for a discussion of revenues from voyage charters are generally higher than equivalent time charter hire revenues, as they are of a shorter duration and cover all costs relating to a given voyage, including port expenses, canal dues and fuel (bunker) costs. Accordingly, year-to-yearper category. Year-to-year comparisons of gross revenues are not necessarily indicative of vessel performance. We believe that the TCE rate provides a more accurate measure for comparison.
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The BDIDry Bulk Industry
The Baltic Dry Index (BDI) average for the years ended December 31, 20192020 and 20202021 was 1,3521,066 points and 1,0662,943 points, respectively; notably though, therespectively. The charter rate volatility exhibited within this periodin 2020 due to the Covid-19COVID-19 pandemic was significant. In 2021, the dry bulk market benefited from recovering demand at a time of limited growth in new tonnage supply which was further constrained by port congestion and difficulties in docking repairs and crew changes, often involving delays and deviations. However, this was still a year of significant and negatively affected our revenues. In particular,volatility as the Baltic Dry Index (BDI) closed at 411BDI recorded its annual high of 5,650 points on February 10, 2020 and slowly recovered byOctober 7, 2021, but ended the year end. Following the increased flow of newbuilding vessels that entered the market during the early 2010's, the oversupply of capacity had a negative impact on the market as demand for61% lower, at 2,217 points. The global dry bulk commodities transfer was not able to absorb the flow of the vessels entering the market. Thecargo fleet deadweight carrying capacity for 20202021 increased by approximately 3.7%, which is3.6% and remains significantly lower from the double digitsubstantial increases during the early 2000's and from 2009 to 2012,2000s, while increase in demand of dry bulk commodities is expected to increaseincreased by approximately 13.5 to 2%4%. The volatility in charter rates in the dry bulk market affects the value of dry bulk vessels, which follows the trends of dry bulk charter rates, and earnings on our charters, and similarly affects our earnings, cash flows and liquidity.
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The Tanker Industry
The tanker industry has also varied significantly, with Aframax LR2 tanker spot rates peaking at around $40,000 per day on average in April 2020 according to BIMCO, before falling significantly in 2020to below $10,000 per day thereafter as a result of the global pandemic. In 2021, the spot tanker market performed at weak levels particularly during the second and the third quarters of the year, with a trend of recovery during the fourth quarter. Overall, 2021 turned out to be one of the worst years for spot crude tanker trades since 2009. The tanker fleet for 2021 increased by approximately 1.6% in terms of deadweight carrying capacity, while demand for crude oil and products is expected to increase at a higher pace, but there is still significant uncertainty due to the COVID-19 pandemic which negatively affects mobility and oil demand. The volatility in charter rates in the tanker market also affects the value of tanker vessels, which follows the trends of tanker charter rates, and similarly affects our earnings, cash flows and liquidity.
Employment and operation of our Fleetfleet
A
Another factor that impacts our profitability is the employment and operation of our Fleet whichfleet. The profitable employment of our fleet is highly dependent on the levels of demand and supply in the dry bulk and tanker shipping industries, our commercial strategy including the decisions regarding the employment mix of our fleet among time, voyage and pool charters as well as our managers’ ability to leverage our relationships with existing or potential customers. The effective operation of our fleet mainly requires regular maintenance and repair, effective crew selection and training, ongoing supply of our Fleetfleet with the spares and the stores that it requires, contingency response planning, auditing of our vessels'vessels’ onboard safety procedures, arrangements for our vessels'vessels’ insurance, chartering of the vessels, training of onboard and on shore personnel with respect to the vessels'vessels’ security and security response plans (ISPS), obtaining of ISM certifications, compliance with environmental regulations and standards, and performing the necessary audit for the vessels within the six months of taking over a vessel and the ongoing performance monitoring of the vessels.
Financial, general and administrative management
The management of financial, general and administrative elements involved in the conduct of our business and ownership of our vessels requires us to manage our financial resources, which includes managing banking relationships, administrating our bank accounts, managing our accounting system, records and financial reporting, monitoring and ensuring compliance with the legal and regulatory requirements affecting our business and assets and managing our relationships with our service providers and customers.
Because many of these factors are beyond our control and certain of these factors have historically been volatile, past performance is not necessarily indicative of future performance and it is difficult to predict future performance with any degree of certainty.
Important Measures and Definitions for Analyzing Results of Operations
We believe that important concepts
Our management uses the following metrics to evaluate our operating results, including the operating results of our segments level and measures for analyzing trendsto allocate capital accordingly:
Vessel Revenues. Vessel revenues are primarily generated from time charters, voyage charters and pool arrangements. Vessel revenues are affected by the number of vessels in our results of operations includefleet, hire rates and the following:
Ownership days. Ownership days are the total number of calendar days in a period during which we owned our vessels. Ownership days are an indicator of the size of our Fleet over a period and determine both the level of revenues and expenses recorded during that specific period.
Available days. Available days are the Ownership days after subtracting off-hire days associated with major scheduled repairs, vessel upgrades and dry-dockings or special or intermediate surveys and major unscheduled repair and positioning days (which do not include ballast voyage days for which compensation has been received by the Company). The shipping industry uses Available days to measure the aggregate number of days a vessel operates which, in turn, are affected by several factors, including the amount of time that we spend positioning our vessels, the amount of time that our vessels spend in dry dock undergoing repairs, maintenance and upgrade work, the age, condition and specifications of our vessels, and levels of supply and demand in the seaborne transportation market. Vessel revenues are also affected by our commercial strategy related to the employment mix of our fleet between vessels on time charters, vessels operating on voyage charters and vessels in pools.
Vessels operating on time charters for a certain period provide more predictable cash flows over that period.Revenues from vessels in pools and on voyage charter are more volatile, as they are typically tied to prevailing market rates. We measure revenues in each segment for three separate activities: (i) time charter revenues, (ii) voyage charter revenues, and (iii) pool revenues. For further discussion of vessel revenues, please refer to Notes 2 and 12 to our consolidated financial statements included elsewhere in this annual report.
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Voyage expenses. Our voyage expenses primarily consist of bunker expenses, port and canal expenses and brokerage commissions paid in connection with the chartering of our vessels. Voyage expenses are incurred primarily during voyage charters or when the vessel is repositioning or unemployed. Bunker expenses, port and canal dues increase in periods during which vessels are availableemployed on voyage charters because these expenses are in this case borne by us. Gain/loss on bunkers may also arise where the cost of the bunker fuel sold to generate revenues. the new charterer is greater or less than the cost of the bunker fuel acquired.
Operating expenses.We are responsible for vessel operating costs, which include crewing, expenses for repairs and maintenance, the cost of insurance, tonnage taxes, the cost of spares and consumable stores, lubricating oils costs, communication expenses, and technical management fees. Expenses for repairs and maintenance tend to fluctuate from period to period because most repairs and maintenance typically occur during periodic drydocking. Our calculation of Available days may not be comparableability to that reported by other companies.
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Fleet utilization. We calculate Fleet utilizationcontrol our vessels’ operating expenses also affects our financial results. Daily vessel operating expenses are calculated by dividing the Available days during a periodfleet operating expenses by the number of Ownership days during thatfor the relevant period. Fleet utilization is used to measure a company's ability to efficiently find suitable employment for its vessels and minimize the number of days that its vessels are off-hire for reasons such as major repairs, vessel upgrades, dry-dockings or special or intermediate surveys and other unforeseen events.
Off-hire. The period our Fleetfleet is unable to perform the services for which it is required under a charter for reasons such as scheduled repairs, vessel upgrades, dry-dockings or special or intermediate surveys or other unforeseen events.
Dry-docking/Special Surveys.We periodically dry-dock and/ or perform special surveys on our Fleetfleet for inspection, repairs and maintenance and any modifications to comply with industry certification or governmental requirements. Our ability to control our dry-docking and special survey expenses and our ability to complete our scheduled dry-dockings and/or special surveys on time also affects our financial results. Dry-docking and special survey costs are accounted under the deferral method whereby the actual costs incurred are deferred and are amortized on a straight-line basis over the period through the date the next survey is scheduled to become due.
Daily vessel operating expenses. The
Ownership Days. Ownership Days are the total number of calendar days in a period during which we owned a vessel. Ownership Days are an indicator of the size of our fleet over a period and determine both the level of revenues and expenses recorded during that specific period.
Available Days. Available Days are the Ownership Days in a period less the aggregate number of days our vessels' operating expenses, including crewing costs, insurancevessels are off-hire due to scheduled repairs, dry-dockings or special or intermediate surveys. The shipping industry uses Available days to measure the aggregate number of days in a period during which vessels are available to generate revenues. Our calculation of Available days may not be comparable to that reported by other companies.
Operating Days. Operating Days are the Available Days in a period after subtracting off-hire and maintenance costs. Ouridle days.
Fleet Utilization. Fleet Utilization is calculated by dividing the Operating Days during a period by the number of Available Days during that period. Fleet Utilization is used to measure a company’s ability to control our vessels' operating expenses also affects our financial results. These expenses include crew wagesefficiently find suitable employment for its vessels and related costs,minimize the costnumber of insurance, expensesdays that its vessels are off-hire for reasons such as major repairs, and maintenance, the cost of spares and consumable stores, lubricating oil costs, tonnage taxesvessel upgrades, dry-dockings or special or intermediate surveys and other miscellaneous expenses. unforeseen events.
Daily vessel operating expenses areTime Charter Equivalent (“TCE”) Rate. The Daily Time Charter Equivalent Rate (“Daily TCE Rate”), is a measure of the average daily revenue performance of a vessel. The Daily TCE Rate is calculated by dividing Fleet operatingtotal revenues (time charter and/or voyage charter revenues, and/or pool revenues, net of charterers’ commissions), less voyage expenses, by the Ownership days for the relevantnumber of Available Days during that period.
Daily company administration expenses. Daily company administration expenses include administration expenses such as audit fees, legal fees, directors' insurance and remuneration, listing fees and other miscellaneous administration expenses, essential for the conduct of our business, and are calculated by dividing company administration expenses by the Ownership days for the relevant period.
Daily management fees. Daily management fees are calculated by dividing management fees by the Ownership days for the relevant time period and represent the fees payable to Castor Ships and Pavimar for managing our Fleet.
Time charter. A Under a time charter, is a contract for the use of a vessel for a specific period of time during which the charterer pays substantially all the vessel voyage related expenses. However, we may incur voyage related expenses when positioning or repositioning vessels before or after the period of a time charter, during periods of commercial waiting time or while off-hire during dry docking or due to other unforeseen circumstances. The Daily TCE Rate is not a measure of financial performance under U.S. GAAP (non-GAAP measure) and should not be considered as an alternative to vessel revenues, net, the most directly comparable GAAP measure, or any other measure of financial performance presented in accordance with U.S. GAAP. However, the Daily TCE Rate is a standard shipping industry performance measure used primarily to compare period-to-period changes in a company’s performance and, management believes that the Daily TCE Rate provides meaningful information to our investors since it compares daily net earnings generated by our vessels irrespective of the mix of charter types (i.e., time charter, voyage expenses, including port charges, bunker expensescharter or other) under which our vessels are employed between the periods while it further assists our management in making decisions regarding the deployment and canal charges. The vessel owner pays the vessel operating expenses, which include crew costs, provisions, deckuse of our vessels and engine stores and spares, lubricants, insurance, maintenance and repairs. The vessel owner is also responsible for each vessel's dry-docking and intermediate and special survey costs. Time charter rates are usually fixed during the termin evaluating our financial performance. Our calculation of the charter. Prevailing time charter rates do fluctuate on a seasonal and year-to-year basis andDaily TCE Rates may not be substantially higher or lower from a prior time charter agreement when the subject vessel is seekingcomparable to renew the time charter agreement with the existing charterer or enter into a new time charter agreement with another charterer. Fluctuations in time charter rates are influencedthat reported by changes in spot charter rates.
Time charter equivalent ("TCE") Rate. Our method of calculating TCE rate is determined by dividing vessel revenues (time charter and/or voyage revenues, net of charterers' commissions and voyage expenses) by the Available days in the relevant period.  Please see please see "Item 3. Key Information— A. Selected Financial Data" on the use by the Company of this Non-GAAP measure.
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The following table presents the operational metrics that management uses to assess our financial condition and results of operations:
  For the year ended 
  December 31, 2019  December 31, 2020 
Operational Metrics      
Available days  545   1,219 
Ownership days  556   1,405 
Fleet utilization  98%  87%
Daily time charter equivalent (or TCE) $10,471  $9,765 
Daily vessel operating expenses $5,041  $5,301 
Daily management fees $382  $662 
Daily general and administrative expenses $681  $805 
EBITDA (1)
 $2,175,894  $2,327,671 
_______________________
(1) For this definition see "Item 3. Key information—A. Selected Financial Data".

Results of Operations
Year ended December 31, 2020 as compared to year ended December 31, 2019
(In U.S. Dollars, except for share and per share data) 
Year ended
December 31, 2019
  
Year ended
December 31, 2020
  Change -amount  Change-% 
Vessel revenues (net of charterers' commissions)  5,967,772   12,487,692   6,519,920   109.3%
Expenses:                
Voyage expenses (including commissions from related parties)  (261,179)  (584,705)  323,526   123.9%
Vessel operating expenses  (2,802,991)  (7,447,439)  4,644,448   165.7%
Management fees to related parties  (212,300)  (930,500)  718,200   338.3%
General and administrative expenses                
• Company administration expenses (including administrations costs from related party)  (378,777)  (1,130,953)  752,176   198.6%
• Public registration costs  (132,091)  —   (132,091)  (100)%
Provision for doubtful debt  —   (37,103)  37,103   100%
Depreciation and amortization  (897,171)  (1,904,963)  1,007,792   112.3%
Operating income  1,283,263   452,029   (831,234)  (64.8)%
                 
Interest and finance costs, net (including interest costs from related party)  (190,574)  (2,154,601)  1,964,027   1,030.6%
Total Other Income / (expenses), net  (195,114)  (2,183,922)  1,988,808   1,019.3%
US Source Income Taxes  —   (21,640)  —   100%
Net income/ (loss) and comprehensive income/ (loss)  1,088,149   (1,753,533)  (2,841,682)  (261.1)%
                 
Earnings/ (Loss) per common share, basic and diluted  0.31   (0.03)        
Weighted average number of common shares, basic and diluted  2,662,383   67,735,195         

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Vessel revenues, net – Vessel revenues, net of charterers' commissions, increased by $6,519,920, or 109.3%, from $5,967,772 in the year ended December 31, 2019, to $12,487,692 in the corresponding period of 2020. This increase was exclusively driven by the addition of the M/V Magic Rainbow, the M/V Magic Horizon and the M/V Magic Nova to our Fleet in the third and fourth quarters of 2020, respectively, which correspondingly increased our Fleet Available days from 545 in the year ended December 31, 2019, to 1,219 in the year ended December 31, 2020, partly counterbalanced by the weaker charter hire rates achieved in certain charter renewals in the current year mostly for the M/V Magic P and the M/V Magic Sun as compared to last year, which we predominantly attribute to the negative impact of the ongoing COVID-19 pandemic. The average daily TCE of our Fleet for the year ended December 31, 2020 was $9,765, or 6.7% lower than the $10,471 earned during the same period ended December 31, 2019, mainly as a result of the weaker charter market rates achieved for certain prolonged periods in 2020 to the majority part of our fleet, but mostly those achieved during the year for the M/V Magic P and M/V Magic Sun, as previously discussed. TCE rate is a non-GAAP measure. Please refer to "Item 3. Key Information— A. Selected Financial Data"other companies. See below for a reconciliation of theDaily TCE rate to Vessel revenues,revenue, net, the most directly comparable U.S. GAAP measure.
Voyage Expenses – Voyage
50
Daily vessel operating expenses. Daily vessel operating expenses consist primarilyare calculated by dividing vessel operating expenses for the relevant period by the Ownership Days for such period.
EBITDA. We define EBITDA as earnings before interest and finance costs (if any), net of brokerage commissions (including commissionsinterest income, taxes (when incurred), depreciation and amortization of deferred dry-docking costs. EBITDA is used as a supplemental financial measure by management and external users of financial statements to assess our operating performance. We believe that EBITDA assists our management by providing useful information that increases the comparability of our performance operating from related parties, if any)period to period and against the operating performance of other companies in our industry that provide EBITDA information. This increased comparability is achieved by excluding the potentially disparate effects between periods or companies of interest, other financial items, depreciation and amortization and taxes, which items are affected by various and possibly changing financing methods, capital structure and historical cost basis and which items may significantly affect net income between periods. We believe that including EBITDA as a measure of operating performance benefits investors in (a) selecting between investing in us and other investment alternatives and (b) monitoring our ongoing financial and operational strength. EBITDA is not a measure of financial performance under U.S. GAAP, does not represent and should not be considered as an alternative to net income, operating income, cash flow from operating activities or any other measure of financial performance presented in accordance with U.S. GAAP. EBITDA as presented below may not be comparable to similarly titled measures of other companies. See below for a reconciliation of consolidated EBITDA to Net Income/(Loss), port expenses,the most directly comparable U.S. GAAP measure.
The following tables reconcile the Daily TCE Rate and gain/loss on bunkers. Gain/loss on bunkers may arise where the costoperational metrics of the bunker fuel sold toCompany on a consolidated basis and per operating segment for the new charterer exceeds/falls short of the cost of the bunker fuel acquired, whereas, loss may also arise due to bunkers consumption due to repositioning, deviation(s) and/or port stay periods. The increase in voyage expenses by $323,526, or by 123.9%, in the yearsyear ended December 31, 20192021, and 2020, was primarily attributabletheir comparative information (where applicable) and our consolidated EBITDA to (i) higher chargesthe most directly comparable GAAP measures for chartering brokerage commissions, consistent with our higherthe periods presented (amounts in U.S. dollars, except for utilization and days).
Reconciliation of Daily TCE Rate to vessel revenues, and (ii) $222,753net — Consolidated
  Year Ended December 31, 
(In U.S. dollars, except for Available Days) 2020  2021 
Vessel revenues, net 
$
12,487,692
  
$
132,049,710
 
Voyage expenses -including commissions from related parties  
(584,705
)
  
(12,950,783
)
TCE revenues $11,902,987  $119,098,927 
Available Days  
1,267
   
6,657
 
Daily TCE Rate $9,395  $17,891 
Reconciliation of bunker losses we incurredDaily TCE Rate to vessel revenues, net — Dry Bulk Segment
  Year Ended December 31, 
(In U.S. dollars, except for Available Days) 2020  2021 
Vessel revenues, net 
$
12,487,692
  
$
102,785,442
 
Voyage expenses -including commissions from related parties  
(584,705
)
  
(1,891,265
)
TCE revenues $11,902,987  $100,894,177 
Available Days  
1,267
   
4,843
 
Daily TCE Rate $9,395  $20,833 
Reconciliation of Daily TCE Rate to vessel revenues, net — Aframax/LR2 Tanker Segment
(In U.S. dollars, except for Available Days) 2021 
Vessel revenues, net 
$
26,559,413
 
Voyage expenses -including commissions from related parties  
(11,003,925
)
TCE revenues $15,555,488 
Available Days  
1,446
 
Daily TCE Rate $10,758 

51
Reconciliation of Daily TCE Rate to vessel revenues, net — Handysize Tanker Segment

(In U.S. dollars, except for Available Days) 2021 
Vessel revenues, net 
$
2,704,855
 
Voyage expenses -including commissions from related parties  
(55,593
)
TCE revenues $2,649,262 
Available Days  
368
 
Daily TCE Rate $7,199 

Operational Metrics— Consolidated
  Year Ended December 31, 
  2020  2021 
Daily vessel operating expenses 
$
5,301
  
$
5,759
 
Ownership Days  
1,405
   
6,807
 
Available Days  
1,267
   
6,657
 
Operating Days  
1,259
   
6,562
 
Fleet Utilization  
99
%
  
99
%
Daily TCE Rate 
$
9,395
  
$
17,891
 
EBITDA 
$
2,327,671
  
$
69,910,529
 

Operational Metrics — Dry Bulk Segment
  Year Ended December 31, 
  2020  2021 
Daily vessel operating expenses 
$
5,301
  
$
5,418
 
Ownership Days  
1,405
   
4,954
 
Available Days  
1,267
   
4,843
 
Operating Days  
1,259
   
4,766
 
Fleet Utilization  
99
%
  
98
%
Daily TCE Rate 
$
9,395
  
$
20,833
 
Operational Metrics — Aframax/LR2 Tanker Segment
  Year Ended December 31, 
  2021 
Daily vessel operating expenses 
$
6,761
 
Ownership Days  
1,446
 
Available Days  
1,446
 
Operating Days  
1,428
 
Fleet Utilization  
99
%
Daily TCE Rate 
$
10,758
 
Operational Metrics — Handysize Tanker Segment
  Year Ended December 31, 
  2021 
Daily vessel operating expenses 
$
6,352
 
Ownership Days  
407
 
Available Days  
368
 
Operating Days  
368
 
Fleet Utilization  
100
%
Daily TCE Rate 
$
7,199
 
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Reconciliation of consolidated EBITDA to net income/(loss) — Consolidated
  Year Ended December 31, 
(In U.S. dollars) 2020  2021 
Net Income/(Loss) 
$
(1,753,533
)
 
$
52,270,487
 
Depreciation and amortization  
1,904,963
   
14,362,828
 
Interest and finance costs, net (including related party interest costs) (1)
  
2,154,601
   
2,779,875
 
US source income taxes  
21,640
   
497,339
 
EBITDA $2,327,671  $69,910,529 

(1)
Includes interest and finance costs and interest income, if any.
Consolidated Results of Operations
Year ended December 31, 2021 as compared to year ended December 31, 2020
(In U.S. Dollars, except for share data) 
Year ended
December 31, 2020
  
Year ended
December 31, 2021
  
Change-
amount
  Change % 
Vessel revenues (net of charterers’ commissions)  12,487,692   132,049,710   119,562,018   957.4%
Expenses:                
Voyage expenses (including commissions to related party)  (584,705)  (12,950,783)  12,366,078   2,114.9%
Vessel operating expenses  (7,447,439)  (39,203,471)  31,756,032   426.4%
Management fees to related parties  (930,500)  (6,744,750)  5,814,250   624.9%
Depreciation and amortization  (1,904,963)  (14,362,828)  12,457,865   654.0%
Provision for doubtful accounts  (37,103)  (2,483)  (34,620)  (93.3%)
General and administrative expenses (including related party)  (1,130,953)  (3,266,310)  2,135,357   188.8%
Operating income  452,029   55,519,085   55,067,056   12,182.2%
Interest and finance costs, net (including interest costs from related party)  (2,154,601)  (2,779,875)  625,274   29.0%
Total other expenses, net  (2,183,922)  (2,751,259)  567,337   26.0%
US source income taxes  (21,640)  (497,339)  475,699   2,198.2%
Net (loss)/income and comprehensive (loss)/income  (1,753,533)  52,270,487   54,024,020   3,080.9%
                 
 (Loss)/ Earnings per common share, basic  (0.26)  0.48         
 (Loss)/ Earnings per common share, diluted  (0.26)  0.47         
Weighted average number of common shares, basic  6,773,519   83,923,435         
Weighted average number of common shares, diluted  6,773,519   85,332,728         

Vessel revenues, net – Vessel revenues, net of charterers’ commissions, increased from $12.5 million in the year ended December 31, 2020, versus $127,900to $132.0 million in the same period of bunker losses2021. This increase was largely driven by the acquisition and delivery to our fleet of 22 vessels since January 1, 2021. The increase in vessel revenues during the year ended December 31, 2021, as compared with the same period of 2020 was further underpinned by the stronger dry bulk shipping market in 2021, further discussed below in the dry bulk segment section, resulting in higher daily net revenues earned on average for our fleet as compared with these earned during the same period of 2020.
Voyage Expenses – Voyage expenses increased by $12.4 million, from $0.6 million in the year ended December 31, 2019, mostly2020, to $13.0 million in the corresponding period of 2021. This increase in voyage expenses is mainly associated with the increase (i) in port expenses and bunkers consumption for the vessels that form the tanker segments of our fleet as a result of bunkers consumed during port stay, repositioning and/or deviation periods. The voyage expensescertain of our fleet, though, on a daily basis, were commensurate with the growth of our fleet since last year.
Vessel Operating Expenses – Vessel operating expenses increased by 165.7%, or $4,644,448, to $7,447,439those being engaged during the year ended December 31, 2020, from $2,802,9912021 in the voyage charter market, and (ii) in brokerage commissions, commensurate with the increase in vessel revenues in the period. This increase was partly offset by bunker gains of $2.7 million during the year ended December 31, 2019. On a daily basis, our2021, as compared with bunker gains of $0.1 million in the same period of 2020.
53
Vessel Operating Expenses – The increase in operating expenses increasedby $31.8 million, from $5,041$7.4 million in 2019the year ended December 31, 2020, to $5,301$39.2 million in 2020.the same period of 2021 mainly reflects the increase in the number of vessels in our fleet.
Management Fees – Management fees in the year ended December 31, 2020, amounted to $0.9 million, whereas, in the same period of 2021, management fees totaled $6.7 million. This increase was largely associated with (i) elevated crew costs forin management fees is primarily due to the vast majoritysizeable increase of our fleet, resulting from difficulties and delays in embarking and disembarking crew ona substantial increase in the total number of Ownership Days for which our vessels amid the ongoing COVID-19 pandemic and, (ii) increased spares and repair maintenance costs for the M/V Magic Rainbow.
Management Fees – During the years ended December 31, 2019 and 2020, we incurred $212,300 and $930,500 in management fees, respectively, or an averagemanagers charge us with a daily management fee of $382 and $662, respectively. From Januaryfee. Effective September 1, 2020, the daily management fee offees for the vessels then comprising our fleet was $500 per day and on September 1, 2020, we and Pavimar agreed to adjust the daily technical management fee of our fleet by Pavimar, was increased from $500 per day to $600 per day. In addition, effective September 1, 2020, we pay Castor Ships a daily commercial management fee of $250. These arevessel and the main attributes to the increase in daily management fees in 2020 as compared withfor the prior year, whereas, the gross increase is also attributed to the growthcommercial and administrative management of our fleet and the resultant increase in our fleet's Ownership Days from 556 in 2019 to 1,405 in 2020.
General and Administrative Expenses
•
Company administration expenses
During the years ended December 31, 2019 and 2020, we incurred Company administration expenses of $378,777 and $1,130,953, respectively. Daily company administration expenses for each of the years ended December 31, 2019 and 2020 were $681 and $804, respectively. The $123 increase in daily administration expenses mainly stemmed from additional legal, investor relations, listing and directors' insurance fees, commensurate with the growth of our business, as well as the quarterly $0.3 million flat fee we payby Castor Ships effective September 1, 2020, in exchange for the management and administration of our business, further discussed under "Itemwas set to $250 per vessel. For more information, refer to “Item 7. Major Shareholders and Related Party Transactions – B. Related Party Transactions".Transactions.”
60


•
Public registration costs
Public registration costs decreased by $132,091 or 100.0%, from $132,091 for year ended December 31, 2019 to $0 forGeneral and Administrative Expenses –General and administrative expenses in the year ended December 31, 2020. Public registration costs relate2020, amounted to $1.1 million, whereas, in the same period of 2021, general and administrative expenses totaled $3.3 million. This increase stemmed from incurred legal and other corporate fees primarily related to the costs incurred by the Company in connection with the Company's registrationgrowth of our company and listing of its 2,400,000 issued and outstanding common shares on the Norwegian OTC on December 21, 2018our shareholder base, and the NASDAQ Capital Market on February 11, 2019. Apart from registration and listing costs, public registration costs further include legal, consultancy and other costs incurred in connection with the subject listings. After the end of the first quarter of 2019,$0.3 million quarterly flat fee we did not incur nor do we expect to incur costs of similar nature.pay Castor Ships, effective September 1, 2020.
Depreciation and Amortization – Depreciation and amortization expenses are comprised of vessels'vessels’ depreciation and the amortization of vessels'vessels’ capitalized dry-dock costs. Depreciation and amortization expenses increased forfrom $1.7 million in the year ended December 31, 2020, due to an increase$13.2 million in vessels' depreciation from $556,101 in 2019 to $1,750,434 in 2020the same period of 2021 as a result of the increase in the size of our Ownership days which was partly offset by a lower dry-dockfleet. Dry-dock and special survey amortization charge of $154,529charges amounted to $0.2 million for the year ended December 31, 2020, versus a relevant charge of $341,070$1.2 million in the respective period of 2019. Dry-dock2021. This increase in dry-dock amortization charges primarily resulted from the ownership of a larger fleet, on average, during 2021, which led to an increase in dry-dock amortization days did not significantly varyfrom 293 in the yearsyear ended December 31, 2019 and 2020, however, average daily dry-dock amortization cost was approximately $527 during 2020 versus an approximate cost of $1,100to 1,524 in 2019, which explains the above noted variation to a large extent.year ended December 31, 2021.
Interest and finance costs, net – The increase by $1,964,027$0.6 million in net interest and finance costs in the year ended December 31, 2020,2021, as compared with the previous year is mainly due to the result of (i) an increase in the level of our weighted outstandingaverage indebtedness from approximately $3.5 million in 2019 to approximately $20.2 million in 2020 (partly set-off, however, by the lower levelto $60.5 million in 2021.
Segment Results of 5.0% of weighted average interest during 2020Operations
Year ended December 31, 2021, as compared to 5.8% during 2019) and (ii)year ended December 31, 2020—Dry Bulk Segment

(In U.S. Dollars, except for share data) 
Year ended
December 31, 2020
  
Year ended
December 31, 2021
  Change-amount  Change % 
Vessel revenues (net of charterers’ commissions)  12,487,692   102,785,442   90,297,750   723.1%
Expenses:                
Voyage expenses (including commissions to related party)  (584,705)  (1,891,265)  1,306,560   223.5%
Vessel operating expenses  (7,447,439)  (26,841,600)  19,394,161   260.4%
Management fees to related parties  (930,500)  (4,890,900)  3,960,400   425.6%
Depreciation and amortization  (1,904,963)  (10,528,711)  8,623,748   452.7%
Provision for doubtful accounts  (37,103)  (2,483)  (34,620)  (93.3
%
)
Operating income (1)
  1,582,982   58,630,483   57,047,501   3,603.8%

(1)
Does not include corporate general and administrative expenses. See the discussion under “Consolidated Results of Operations” above.
Vessel revenues, net
Vessel revenues, net of charterers’ commissions for our dry bulk segment, increased from $12.5 million in the non-cash recurring amortization expenses in connection with our existing credit facilities and the non-cash accelerated amortization expenses related to deferred financing costs and to a beneficial conversion feature recognized in connection with our fully repaid, as ofyear ended December 31, 2020, $5.0 Million Convertible Debentures aggregatingto $102.8 million in the same period of 2021. This increase was largely driven by the acquisition and delivery to our fleet of 13 dry bulk vessels since January 1, 2021. The increase in vessel revenues during the year ended December 31, 2021, as compared with the same period of 2020 was further underpinned by the stronger dry bulk shipping market in 2021, resulting in higher daily net revenues earned on average for our fleet as compared with these earned during the same period of 2020.
54
Voyage Expenses
Voyage expenses increased by $1.3 million, from $0.6 million in the year ended December 31, 2020, to $1.9 million in the corresponding period of 2021. This increase in voyage expenses is mainly associated with (i) the increase in brokerage commissions, commensurate with the increase in vessel revenues in the period, (ii) the increase in bunkers consumption for certain vessels of our fleet primarily as a result of bunkers ballast consumption for which relevant ballast compensation is received by the charterers, partly offset by bunker gains of $2.7 million during the year ended December 31, 2021, as compared with bunker gains of $0.1 million in the same period of 2020.
Vessel Operating Expenses
The increase in operating expenses for our dry bulk segment by $19.4 million, from $7.4 million in the year ended December 31, 2020, to $26.8 million in the same period of 2021 mainly reflects the increase in the number of dry bulk vessels in our fleet.
Management Fees
Management fees for our dry bulk segment in the year ended December 31, 2020, amounted to $0.9 million, whereas, in the same period of 2021, management fees totaled $4.9 million. This increase in management fees is primarily due to the sizeable increase of our dry bulk fleet, resulting in a substantial increase in the total number of Ownership Days for which our managers charge us with a daily management fee. 
Depreciation and Amortization 
Depreciation expenses for our dry bulk segment increased from $1.7 million in the year ended December 31, 2020, to $9.5 million in the same period of 2021 as a result of the increase in the size of our dry bulk fleet. Dry-dock and special survey amortization charges amounted to $0.2 million for the year ended December 31, 2020, compared to a charge of $1.0 million in the respective period of 2021. This increase in dry-dock amortization charges primarily resulted from the ownership of a larger dry bulk fleet, on average, during 2021 which led to an amountincrease in dry-dock amortization days from 293 in the year ended December 31, 2020, to 1,349 in the year ended December 31, 2021.
Year ended December 31, 2021, as compared to year ended December 31, 2020—Aframax/LR2 Tanker Segment

We entered the Aframax/LR2 tanker business in the first quarter of $1,131,524.2021 and, accordingly, no comparative financial information exists for the year ended December 31, 2020.
Recent Accounting Pronouncements
(In U.S. Dollars, except for share data) 
Year ended
December 31, 2020
  
Year ended
December 31, 2021
  Change -amount  Change % 
Vessel revenues (net of charterers’ commissions)  
—
   26,559,413   26,559,413   100.0%
Expenses:                
Voyage expenses (including commissions to related party)  
—
   (11,003,925)  (11,003,925)  100.0%
Vessel operating expenses  
—
   (9,776,724)  (9,776,724)  100.0%
Management fees to related parties  
—
   (1,433,950)  (1,433,950)  100.0%
Depreciation and amortization  
—
   (3,087,764)  (3,087,764)  100.0%
Operating income  
—
   1,257,050   1,257,050   100.0%

Refer
(1)
Does not include corporate general and administrative expenses. See the discussion under “Consolidated Results of Operations” above.
Vessel revenues, net
 
Vessel revenues, net of charterers’ commissions for our Aframax/LR2 tanker segment amounted to "Note 2. Significant Accounting Policies"$26.6 million in the year ended December 31, 2021. During the year ended December 31, 2021, we owned on average 4.0 Aframax/LR2 tanker vessels that earned on average a daily TCE rate of $10,758. During the period in which we owned them, three of our Aframax/LR2 vessels were engaged in the voyage charter market, three in the time charter market and one, the M/T Wonder Vega, operated in a pool.
55
Voyage Expenses
Voyage expenses for our Aframax/LR2 tanker segment amounted to $11.0 million in the year ended December 31, 2021. As noted under Vessel revenues, net, during the year ended December 31, 2021, three of our Consolidated Financial Statements includedAframax/LR2 vessels operated in the voyage charter market. When our vessels trade in this annual report.market, voyage expenses are borne by us. Voyage expenses for our Aframax/LR2 segment during the year ended December 31, 2021, consisted primarily of bunker consumption expenses, port expenses and brokerage commissions.
Inflation
Inflation has not hadVessel Operating Expenses
Operating expenses for our Aframax/LR2 tanker segment amounted to $9.8 million in the year ended December 31, 2021.
Management Fees
Management fees for our Aframax/LR2 tanker segment amounted to $1.4 million in the year ended December 31, 2021.
Depreciation and Amortization 
Depreciation and amortization expenses for our Aframax/LR2 tanker segment amounted to $3.1 million in the year ended December 31, 2021.
Year ended December 31, 2021, as compared to year ended December 31, 2020–Handysize Tanker Segment
We entered the Handysize tanker business in the second quarter of 2021 and accordingly no comparative financial information exists for the year ended December 31, 2020.
(In U.S. Dollars, except for share data) 
Year ended
December 31, 2020
  
Year ended
December 31, 2021
  Change -amount  Change % 
Vessel revenues (net of charterers’ commissions)  
—
   2,704,855   2,704,855   100.0%
Expenses:                
Voyage expenses (including commissions to related party)  
—
   (55,593)  (55,593)  100.0%
Vessel operating expenses  
—
   (2,585,147)  (2,585,147)  100.0%
Management fees to related parties  
—
   (419,900)  (419,900)  100.0%
Depreciation and amortization  
—
   (746,353)  (746,353)  100.0%
Operating loss  
—
   (1,102,138)  (1,102,138)  100.0%

(1)
Does not include corporate general and administrative expenses. See the discussion under “Consolidated Results of Operations” above.
Vessel revenues, net
Vessel revenues, net of charterers’ commissions, for our Handysize tanker segment amounted to $2.7 million in the year ended December 31, 2021. During the year ended December 31, 2021, we owned on average 1.1 Handysize tanker vessels that earned a material effect ondaily TCE rate of $7,199. During the period in which we owned them, both our Handysize tanker vessels were engaged in a pool.
Voyage Expenses
Voyage expenses given recent economic conditions. Infor our Handysize tanker segment amounted to $0.1 million in the event that significant global inflationary pressures appear, these pressures would increaseyear ended December 31, 2021. Bunker expenses, port and canal dues are borne by our operating costs.pool operators when our vessels operate in pools.
Currency Fluctuations
Refer to risk factor "Exposure to currency exchange rate fluctuations will result in fluctuations in our cash flows and operating results". Currency fluctuations have not had a material effect on our expenses.
Impact of Governmental Economic, Fiscal, Monetary or Political Policies
Refer to risk factor "Political instability, terrorist attacks, international hostilities and global public health threats can affect the seaborne transportation industry, which could adversely affect our business".
6156

Vessel Operating Expenses

Operating expenses for our Handysize tanker segment amounted to $2.6 million in the year ended December 31, 2021.
Management Fees
Management fees for our Handysize tanker segment amounted to $0.4 million in the year ended December 31, 2021.
Depreciation and Amortization 
Depreciation and amortization expenses amounted to $0.7 million in the year ended December 31, 2021. During the year ended December 31, 2021, one Handysize tanker vessel in the Company’s tanker fleet, the Wonder Mimosa, underwent its scheduled dry-dock and special survey resulting in period dry-dock amortization charges amounting to $0.2 million.
Implicationsof Being an Emerging Growth Company
We had less than $1.07 billion in revenue during our last fiscal year, which means that we are an "emerging“emerging growth company"company” as defined in the Jumpstart Our Business Startups Act, or JOBS Act. An emerging growth company may take advantage of specified reduced public company reporting requirements that are otherwise applicable generally to public companies. These provisions include:
an exemption from the auditor attestation requirement of management'smanagement’s assessment of the effectiveness of the emerging growth company'scompany’s internal controls over financial reporting pursuant to Section 404(b) of Sarbanes-Oxley; and
an exemption from compliance with any new requirements adopted by the Public Company Accounting Oversight Board, or the PCAOB, requiring mandatory audit firm rotation or a supplement to the auditor'sauditor’s report in which the auditor would be required to provide additional information about the audit and financial statements.
We may choose to take advantage of some or all of these reduced reporting requirements. We may take advantage of these provisions until the endlast day of the fiscal year following the fifth anniversary of the date we first sell our common equity securities pursuant to an effective registration statement under the Securities Act or such earlier time that we are no longer an emerging growth company. We will cease to be an emerging growth company if we have more than $1.07 billion in "total“total annual gross revenues"revenues” during our most recently completed fiscal year, if we become a "large“large accelerated filer"filer” with a public float of more than $700 million, as of the last business day of our most recently completed second fiscal quarter or as of any date on which we have issued more than $1 billion in non-convertible debt over the three-year period prior to such date. For as long as we take advantage of the reduced reporting obligations, the information that we provide shareholders may be different from information provided by other public companies.
In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. See “Item 3. "KeyKey Information—D. Risk Factors—Risks Relating to Our Common Shares—We are an "emerging‘emerging growth company"company’ and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common sharessecurities less attractive to investors". As of October 1, 2018, weinvestors.” We have irrevocably elected to opt out of such extended transition period.
B.Liquidity and Capital Resources
We operate in a capital-intensive industry, and we expect to finance the purchase of additional vessels and other capital expenditures through a combination of proceeds from equity offerings, borrowings from debt transactions and cash generated from operations. Our liquidity requirements relate to servicing the principal and interest on our debt, funding capital expenditures and working capital (which includes maintaining the quality of our vessels and complying with international shipping standards and environmental laws and regulations) and maintaining cash reserves for the purpose of satisfying a certain minimum liquidity restrictions contained in our credit facilities. In accordance with our business strategy, other liquidity needs may relate to funding potential investments in new vessels and maintaining cash reserves against fluctuations in operating cash flows. Our funding and treasury activities are intended to maximize investment returns while maintaining appropriate liquidity.
57
For the year ended December 31, 2020,2021, our principal sources of funds were cash from operations, and the net proceeds from (i) the issuance of common stockshares pursuant to the June2021 January First Equity Offering, the 2021 January Second Equity Offering, the 2021 April Equity Offering, the Second ATM Program (each as defined below in “—Equity Transactions”), and the July Equity Offering and the resultant issuanceexercise of certain Class A Warrants pursuant to the June Equity Offeringwarrants under our then effective warrant schemes, and (ii) the incurrence of secured and unsecured debt as discussed below under "Our“—Our Borrowing Activities".Activities.” As of December 31, 20202021 and December 31, 2019,2020, we had cash and cash equivalents of $8.9$37.2 million and $4.6$8.9 million (which excludes $6.2 million and $0.5 million of minimum cash restricted in both yearseach period, under our debt agreements), respectively. Cash and cash equivalents are primarily held in U.S. dollars.
62


Working capital is equal to current assets minus current liabilities. As of December 31, 2020,2021, we had a working capital surplus of $2.7$21.0 million as compared to a working capital surplus of $3.2$2.7 million as of December 31, 2019. 2020.
We believe that our current sources of funds and those that we anticipate to internally generate for a period of at least the next twelve months from the date of this annual report, will be sufficient to fund the operations of our Fleet,fleet, meet our normal working capital requirements and service the principal and interest on our debt.debt for that period.
For a discussion of our management agreements with our related-party managers and relevant fees charged, see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions.”
Capital Expenditures
We make capital expenditures from time to time in connection with vessel acquisitions and vessels upgrades and improvements (either for the purpose of meeting regulatory or legal requirements or for the purpose of complying with requirements imposed by classification societies), which we finance with cash from operations, debt and equity issuances. As of December 31, 2020, we had no2021, our commitments for capital expenditures related to vessel acquisitions. Asacquisitions amounted to approximately $21.2 million in connection with the acquisition of the date of this annual report, remaining capital expenditure requirements relatingMagic Callisto that was delivered to our recent vessel acquisitions amount to 26.7 million, all due within 2021. We expect to cover such capital expendituresus on January 4, 2022. The acquisition was financed in its entirety with cash from operations and cash on hand.
In November 2018, we
We have entered into a contractcontracts to purchase and install BWMS on five of our then owned dry bulk carriers, as further amended in October 2019our two Handysize tanker vessels and three of our Aframax/LR2 tanker vessels. As of December 2020, to reflect our subsequent vessel acquisitions. We31, 2021, we had completed and put into use the BWMS installation on one of these five dry bulk carriers, the M/V Magic Sun during, and one of our two Handysize tanker vessels, the vessel's scheduled dry-docking which took place inWonder Mimosa, whereas the fourth quarter of 2020, whereas, thecontracted BWMS system installations on the M/V Magic Premaining eight vessels, comprising of four dry bulk vessels, one handysize tanker vessel and the M/V Magic Moon were granted extensions from the third quarter of 2020three Aframax/LR2 tanker vessels are expected to the third quarter ofbe concluded during 2022. It is estimated that the aggregate contractual obligations related to all these purchases, as well as purchases onfor two other vessels in our remaining Fleet vessels (in cases where not already installed),fleet that have completed their BWMS installation, excluding installation costs, will be on aggregate approximately $0.8€3.0 million with scheduled payments(or $3.4 million on the basis of $0.5a Euro/US Dollar exchange rate of €1.0000/$1.1324 as of December 31, 2021), of which €2.4 million (or $2.7 million) are due in 20212022 and $0.3€0.6 million (or $0.7 million) are due in 2022. We also expect to cover such cash flow needs with cash from operations and cash on hand.2023. 

A failure to fulfill our capital expenditure commitments generally results in a forfeiture of advances paid with respect to the contracted acquisitions and a write-off of capitalized expenses. In addition, we may also be liable for other damages for breach of contract(s). Such events could have a material adverse effect on our business, financial condition, and results of operations.operating results.
Equity IssuancesTransactions
On June 28, 2019, we entered into an equity distribution agreement, or the First Equity Distribution Agreement, with Maxim Group LLC (“Maxim”) acting as a sales agent over a minimum period of 12-months, under which we may,could, from time to time, offer and sell shares of our common stockshares through an at-the-market oroffering (the “First ATM programProgram”), having an aggregate offering price of up to $10,000,000. As of December 31, 2020,$10.0 million. No warrants, derivatives, or other share classes were associated with this transaction. On June 21, 2021, we hadterminated the First ATM Program. Under the First ATM Program we raised gross and net proceeds (after deducting sales commissions and other fees and expenses) under the ATM of $2.6 million and $2.3 million, respectively, by issuing and selling 618,11261,811 common shares. The net proceeds received underfrom the First ATM Program were used to partly finance the acquisition of the M/V Magic Moon. We have not incurred any further sales under the ATM program since September 2019.
On October 10, 2019, we reached an agreement with all of the holders of our Series A Preferred Shares to waive all due and overdue dividends and to adopt and to Amendamend and Restaterestate the Statement of Designations of our Series A Preferred Shares, or the Series A Agreement.Shares. Pursuant to the Series A Agreement,this amendment and restatement, on October 17, 2019, we issued 300,00030,000 common shares to the holders of the Series A Preferred Shares in exchange for the waiver of approximately $4.3 million worth of dividends accumulated on the Series A Preferred Shares, for the period since their original issuance to June 30, 2019.On December 8, 2021, we redeemed  all our Series A Preferred Shares at a cash liquidation preference of $30.00 per share, for a total amount of $14.4 million. For further information on the Series A Preferred Shares and their redemption, see Note 8 (“(b) Preferred Shares¾Series A Preferred Shares amendment and accumulated dividends settlement”) of our consolidated financial statements included elsewhere in this annual report.
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On January 27, 2020, we entered into a securities purchase agreement with YAII PN, LTD, pursuant to which we agreed to sell and the Investorit agreed to purchase up to three convertible debentures for a maximum aggregate price of $5.0 million, further discussed below under "Our“—Our Borrowing Activities"Activities.” During the period from January 2020 up until June 2020, the Investor had converted the full $5.0 million principal amount and $0.1 million of interest under the $5.0 Million Convertible Debentures for 8,042,078804,208 common shares.
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On June 23, 2020, we entered into an agreement with Maxim, acting as underwriter, pursuant to which we offered and sold 59,110,0005,911,000 units, each unit consisting of (i) one common share or a pre-funded warrant to purchase one common share at an exercise price equal to $0.01$0.10 per common share (a "Pre-Funded Warrant"“Pre-Funded Warrant”), and (ii) one Class A Warrant to purchase one common share (a "Class“Class A Warrant"Warrant”), for $0.35$3.50 per unit (or $0.34$3.40 per unit including a Pre-Funded Warrant), or the(the “2020 June Equity Offering.Offering”). The 2020 June Equity Offering which closed on June 26, 2020 and resulted in the issuance of 59,082,6865,908,269 common shares and 59,110,0005,911,000 Class A Warrants, which also included 7,710,000771,000 over-allotment units pursuant to an over-allotment option that was exercised by Maxim on June 24, 2020. In connection with this offering, weWe raised gross and net cash proceeds from this transaction of approximately $20.7 million and $18.6 million, respectively. Further, as of March 26,December 31, 2021, an aggregate of 58,393,7005,848,656 Class A Warrants have been exercised at an exercise price of $0.35$3.50 per warrant, for which we have received total gross proceeds of approximately $20.4$20.5 million.
On July 12, 2020, we entered into agreements with certain unaffiliated institutional investors pursuant to which we offered 57,750,0005,775,000 common shares in a registered offering (the "July“2020 July Equity Offering"Offering”). In a concurrent private placement, we also issued warrants to purchase up to 57,750,0005,775,000 common shares (the "Private“Private Placement Warrants"Warrants”). The aggregate purchase price for each common share and Private Placement Warrant was $0.30.$3.00. In connection with the 2020 July Equity Offering, which closed on July 15, 2020, we received gross and net cash proceeds of approximately $17.3 million and $15.6$15.7 million, respectively. Further, as of March 26,December 31, 2021, an aggregate of 57,071,3605,707,136 Private Placement Warrants have been exercised at an exercise price of $0.35$3.50 per warrant, for which we have received total gross proceeds of approximately $20.0 million.
On December 30, 2020, we entered into agreements with certain unaffiliated institutional investors pursuant to which we offered 94,750,0009,475,000 common shares and warrants to purchase 94,750,0009,475,000 common shares (the "January“January 5 Warrants"Warrants”) in a registered direct offering which closed on January 5, 2021.2021 (the “2021 January First Equity Offering”). The aggregate purchase price for each common share and January 5 Warrant was $0.19.$1.90. In connection with this offering, we received gross proceeds of approximately $18.0 million and net proceeds of approximately $16.4$16.5 million, net of estimated fees and expenses of approximately $1.6$1.5 million. All of the January 5 Warrants have been exercised at an exercise price of $0.19$1.90 per warrant, for which we have received total gross proceeds of approximately $18.0 million.
On January 8, 2021, we entered into agreements with certain unaffiliated institutional investors pursuant to which we offered 137,000,00013,700,000 common shares and warrants to purchase 137,000,00013,700,000 common shares (the "January“January 12 Warrants"Warrants”) in a registered direct offering.offering which closed on January 12, 2021 (the “2021 January Second Equity Offering”). The aggregate purchase price for each common share and January 12 Warrant was $0.19.$1.90. In connection with this offering, which closed on January 12, 2021, we received gross proceeds of approximately $26.0 million and net proceeds of approximately $24.0$24.1 million, net of estimated fees and expenses of approximately $2.0$1.9 million. All of the January 12 Warrants have been exercised at an exercise price of $0.19$1.90 per warrant, for which we have received total gross proceeds of approximately $26.0 million.
On April 5, 2021, we entered into agreements with certain unaffiliated institutional investors pursuant to which we offered and sold 19,230,770 common shares and warrants to purchase up to 19,230,770 common shares (the “April 7 Warrants”) in a registered direct offering which closed on April 7, 2021 (the “2021 April Equity Offering”). In connection with the 2021 April Equity Offering, we received gross and net cash proceeds of $125.0 million and $116.3 million, respectively. As of December 31, 2021, all April 7 Warrants having an exercise price of $6.50 remained unexercised and potentially issuable into common shares.
On May 28, 2021, we effected a 1-for-10 reverse stock split of our common shares without any change in the number of our authorized common shares. As a result of the reverse stock split, the number of outstanding shares as of May 28, 2021, was decreased to 89,955,848 while the par value of the Company’s common shares remained unchanged at $0.001 per share. All share and per share amounts, as well as warrant shares eligible for purchase under the Company’s effective warrant schemes have been retroactively adjusted to reflect the reverse stock split.
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On June 14, 2021, we entered into an equity distribution agreement, or the Second Equity Distribution Agreement, with Maxim acting as a sales agent over a minimum period of 12-months, under which we may, from time to time, offer and sell our common shares through an at-the-market offering (the “Second ATM Program”), having an aggregate offering price of up to $300.0 million. No warrants, derivatives, or other share classes were associated with this transaction. From the Second ATM Program effective date and as of December 31, 2021, we had raised gross and net proceeds (after deducting sales commissions and other fees and expenses) of $12.9 million and $12.4 million, respectively, by issuing and selling 4,654,240 common shares. On March31, 2022, we entered into an amended and restated equity distribution agreement with Maxim, which, among other changes, reduced the aggregate offering price under the Second ATM Program to $150.0 million. For further details, we encourage you to refer to the terms of the amended and restated equity distribution agreement, attached as an exhibit to this annual report.

Our Borrowing Activities
As of December 31, 2020,2021, we had $18.5$103.8 million of gross indebtedness outstanding under our debt agreements, comprising of which $7.2$87.5 million maturesof indebtedness related to our dry bulk segment and $16.3 million of indebtedness related to our Aframax/LR2 segment. Of this total figure, $16.7 million mature in the twelve-month period ending December 31, 2021.2022. Our contractualborrowing commitments, as of December 31, 2020, primarily relate2021, relating to debt and interest repayments of $20.0 million under our credit facilities amounted to $114.4 million, of which approximately $7.8$20.1 million mature in less than one year. The calculation of interest payments has been made assuming interest rates based on the LIBOR specific to our variable rate credit facilities as of December 31, 2021, and our applicable margin rate.
As of December 31, 2020,2021, we also were in compliance with all the financial and liquidity covenants contained in the Alpha Bank Facility (defined below) and the Chailease Financial Services Facility.our debt agreements.
Castor Maritime Inc. Credit Facilities
$5.0 Million Term Loan Facility
On August 30, 2019, we entered into a $5.0 million unsecured term loan with Thalassa, Investment Co. S.A., or Thalassa, an entity affiliated with Petros Panagiotidis, or the $5.0 Million Term Loan Facility.Panagiotidis. The proceeds from the $5.0 Million Term Loan Facilitythis facility were used to partly finance the acquisition of the M/V Magic Sun. The entire loan amount was drawn down on September 3, 2019. The $5.0 Million Term Loan Facility bearsThis facility bore a fixed interest rate at 6.0%6.00% per annum and had an original bullet repayment on March 3, 2021, a date which was eighteen (18) months after the drawdown date. On March 2, 2021, the maturity of the $5.0 Million Term Loan Facilitythis facility was extended for an additional six-month term on similar terms with those of the original loan agreement. TheAt its extended maturity, on September 3, 2021, we repaid the principal and interest due and owing from us to Thalassa and, as a result, with effect from that date, we were discharged from all liabilities and obligations under this facility.
$5.0 Million Convertible Debentures
On January 27, 2020, we entered into a securities purchase agreement with YAII PN, LTD,pursuant to which, on January 27, 2020, February 10, 2020, and February 19, 2020, we issued and sold to that investor three unsecured convertible debentures in original principal amounts of $2.0 million, $1.5 million and $1.5 million each, respectively. These debentures originally matured 12 months from their issuance dates and bore fixed interest at 6% per annum. As of June 8, 2020, the investor converted in full the aggregate $5.0 million of principal and $0.1 million of interest due under the debentures for 804,208 common shares.
Dry Bulk Segment Credit Facilities
$11.0 Million Term Loan Facility may be prepaid in whole or in part at any time prior to its maturity, at our option. The $5.0 Million Term Loan Facility contains event of default provisions and covenants customary for unsecured facilities of this type, including, but not limited to, failure to pay, bankruptcy and insolvency, material litigation, change of business, as further set forth in the provisions of the $5.0 Million Term Loan Facility. The $5.0 Million Term Loan Facility does not impose any financial covenant requirements or other minimum liquidity restrictions on us.
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Alpha Bank Facility - $11.0 Million Senior Secured Credit Facility
On November 22, 2019, two of our wholly owned dry bulk vessel ship-owning subsidiaries, Spetses Shipping Co. and Pikachu Shipping Co., our wholly-owned subsidiaries, concluded as co-borrowers, or the Borrowers,entered into our first senior secured financingterm loan facility in the amount of $11.0 million or thewith Alpha Bank Facility, the net proceeds of which wereS.A. The facility was drawn down in two tranches on December 2, 2019. The Alpha Bank FacilityThis facility has a term of five years from the drawdown date, bears interest at a 3.50% margin over LIBOR per annum and is repayable in twenty (20) equal quarterly instalments of $400,000 each, plus a balloon instalment of $3.0 million payable at maturity, on December 2, 2024.
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The above facility is secured by, including but not limited to, a first preferred mortgage and first priority general assignment covering earnings, insurances and requisition compensation over the vessels owned by the Borrowers,borrowers (the Magic Moon and the Magic P), an earnings account pledge, shares security deed relating to the shares of the vessels'vessels’ owning subsidiaries, manager'smanager’s undertakings and is guaranteed by Castor.
the Company. The Alpha Bank Facilityfacility also contains certain customary minimum liquidity restrictions and financial covenants that require the Borrowers to:
borrowers to (i) maintain a certain amount of minimum free liquidity per collateralized vessel ("the Minimum Liquidity Deposit");vessel; and
(ii) meet a specified minimum security requirement ratio, which is the ratio of the aggregate market value of the mortgaged vessels plus the value of any additional security and the value of the Minimum Liquidity Depositminimum liquidity deposits referred to above to the aggregate principal amounts due under the Alpha Bank Facility.facility.
Chailease Financial Services
$4.5 Million Term Loan Facility - $4.5 Million Senior Secured Credit Facility
On January 23, 2020, pursuant to the terms of a credit agreement, our wholly owned dry bulk vessel ship-owning subsidiary, Bistro Maritime Co., our wholly-owned subsidiary, entered into a $4.5 million senior secured term loan facility with Chailease International Financial Services Co., Ltd., or the Chailease Financial Services Facility. The loanfacility was drawn down on January 31, 2020, is repayable in twenty (20) equal quarterly installments of $150,000 each, plus a balloon installment of $1.5 million payable at maturity and bears interest at a 4.50% plusmargin over LIBOR per annum.
The above facility contains a standard security package including a first preferred mortgage on the vessel owned by the borrower (the Magic Sun), pledge of bank account, charter assignment, shares pledge and a general assignment over the vessel'svessel’s earnings, insurances and any requisition compensation in relation to the vessel owned by the borrower, and is guaranteed by the Company and Pavimar.Pavimar S.A. Pursuant to the terms of the Chailease Financial Services Facility,this facility, the Company is also subject to a certain minimum liquidity restriction requiring the borrower to maintain a certain credit balance withcash collateral deposit in an account held by the lender (the "Cash Collateral") as well as certain negative covenants customary for this type of facilities, negative covenants.facility. The credit agreement governing the Chailease Financial Services Facilitythis facility also requires maintenance of a minimum value to loan ratio being the aggregate principal amount of (i) fair market value of the collateral vessel and (ii) the value of any additional security (including the Cash Collateral)cash collateral deposit referred to above), to the aggregate principal amount of the loan.
$5.0 Million Convertible Debentures
On January 27, 2020, we entered into a securities purchase agreement with the Investor, pursuant to which, on January 27, 2020, February 10, 2020 and February 19, 2020, we issued and sold to the Investor three convertible debentures in original principal amounts of $2.0 million, $1.5 million and $1.5 million each, respectively. The $5.0 Million Convertible Debentures originally matured 12 months from their issuance dates and bore fixed interest at 6% per annum. As of June 9, 2020, the Investor had converted the aggregate $5.0 million of principal and $0.1 million of interest due under the $5.0 Million Convertible Debentures for 8,042,078 common shares.
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$15.315.29 Million Term Loan Facility
On January 22, 2021, pursuant to the terms of a credit agreement, two of our wholly owned dry bulk vessel ship-owning subsidiaries, Pocahontas Shipping Co. and Jumaru Shipping Co., our wholly-owned subsidiaries, entered into the $15.3 Million Term Loan Facilitya $15.29 million senior secured term loan facility with Hamburg Commercial Bank AG. The loanfacility was drawn down in two tranches on January 27, 2021, is repayable in sixteen (16) equal quarterly installments of $471,000 each, plus a balloon installment of $7.8 million payable at maturity and bears interest at a 3.30% plusmargin over LIBOR per annum.
The above facility contains a standard security package including first preferred mortgages on the vessels owned by the borrowers (the Magic Horizon and the Magic Nova), pledge of bank accounts, charter assignments, shares pledge and a general assignment over the vessels'vessels’ earnings, insurances and any requisition compensation in relation to the vessels owned by the borrowers, and is guaranteed by the Company. Pursuant to the terms of the $15.3 Million Term Loan Facility,this facility, the Company is also subject to a certain minimum liquidity restriction requiring the borrowers to maintain a certain creditcash collateral deposit balance with the lender (the "Liquidity Accounts")(secured by an account pledge), to maintain and gradually fund certain dry-dock reserve accounts in order to ensure the payment of any costs incurred in relation to the next dry-docking of each mortgaged vessel, as well as to certain negative covenants customary for this type of facility. The credit agreement governing this facility also requires maintenance of a minimum security cover ratio being the aggregate amount of (i) the fair market value of the collateral vessels, (ii) the value of the cash collateral deposit balance referred to above, (iii) the value of the dry-dock reserve accounts referred to above, and (iv) any additional security provided, over the aggregate principal amount outstanding of the loan.
$40.75 Million Term Loan Facility
On July 23, 2021, pursuant to the terms of a credit agreement, four of our wholly owned dry bulk vessel ship-owning subsidiaries, Liono Shipping Co., Snoopy Shipping Co., Cinderella Shipping Co., and Luffy Shipping Co., entered into a $40.75 million senior secured term loan facility with Hamburg Commercial Bank AG. The loan was drawn down in four tranches on July 27, 2021, is repayable in twenty (20) equal quarterly installments of $1,154,000 each, plus a balloon installment in the amount of $17.7 million payable at maturity simultaneously with the last instalment and bears interest at a 3.10% margin over LIBOR per annum.

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The above facility contains a standard security package including first preferred mortgages on the vessels owned by the borrowers (the "Dry-dock Reserve Accounts"Magic Thunder, Magic Nebula, Magic Eclipse and the Magic Twilight), pledge of bank accounts, charter assignments, and a general assignment over the vessels’ earnings, insurances and any requisition compensation in relation to the vessels owned by the borrowers  and is guaranteed by the Company. The Company is also subject to a certain minimum liquidity restriction requiring the borrowers to maintain a certain liquidity deposit cash balance pledged to lender under an account pledge, a specified portion of which shall be released to the borrowers following the repayment of the fourth installment with respect to all four tranches, to maintain and gradually fund certain dry-dock reserve accounts in order to ensure the payment of any costs incurred in relation to the next dry-docking of each mortgaged vessel, as well as to certain negative covenants customary for this type of facility. The credit agreement governing this facility requires maintenance of a minimum security cover ratio being the aggregate amount of (i) the aggregate market value of the collateral vessels, (ii) the value of the dry-dock reserve accounts referred to above, and, (iii) any additional security provided over the aggregate principal amount outstanding of the loan.
$23.15 Million Term Loan Facility
On November 22, 2021, pursuant to the terms of a credit agreement, two of our wholly owned dry bulk vessel ship-owning subsidiaries, Bagheera Shipping Co. and Garfield Shipping Co., entered into a $23.15 million senior secured term loan facility with Chailease International Financial Services (Singapore) Pte. Ltd. The loan was drawn down in two tranches on November 24, 2021, both of which mature five years after the drawdown date and are repayable in sixty (60) monthly installments (1 to 18 in the amount of $411,500 and 19 to 59 in the amount of $183,700) and (b) a balloon installment in the amount of $8.2 million payable at maturity simultaneously with the last instalment and bears interest at a 4.00% margin LIBOR over annum.
The above facility contains a standard security package including a first preferred mortgage on the vessels owned by the borrowers (the Magic Rainbow and the Magic Phoenix), pledge of bank accounts, charter assignments, shares pledge and a general assignment over the vessel’s earnings, insurances, and any requisition compensation in relation to the vessel owned by the borrowers and is guaranteed by the Company. Pursuant to the terms of this facility, the Company is also subject to certain negative covenants customary for this type of facility and a certain minimum liquidity restriction requiring the borrowers to maintain a certain cash collateral deposit in an account held by the lender.
$55.0 Million Term Loan Facility
On January 12, 2022, pursuant to the terms of a credit agreement, five of our wholly owned dry bulk vessel ship-owning subsidiaries, Mulan Shipping Co., Johnny Bravo Shipping Co., Songoku Shipping Co., Asterix Shipping Co. and Stewie Shipping Co., entered into a $55.00 million secured term loan facility with Deutsche Bank AG. The loan was drawn down in five tranches on January 13, 2022, is repayable in twenty (20) quarterly installments (1 to 6 in the amount of $3,535,000, 7 to 12 in the amount of $1,750,000 and 13 to 20 in the amount of $1,340,000) and (b) a balloon installment in the amount of $12.6 million payable at maturity simultaneously with the last instalment and bears interest at a 3.15% margin over adjusted SOFR per annum.
The above facility contains a standard security package including a first preferred mortgage on the vessels, owned by the borrowers (the Magic Starlight, Magic Mars, Magic Pluto, Magic Perseus, and the Magic Vela), pledge of bank accounts, charter assignments, shares pledge and a general assignment over the vessel’s earnings, insurances, and any requisition compensation in relation to the vessel owned by the borrower and is guaranteed by the Company. Pursuant to the terms of this facility, the borrowers are subject (i) a specified minimum security cover requirement, which is the maximum ratio of the aggregate principal amounts due under the facility to the aggregate market value of the mortgaged vessels plus the value of the dry-dock reserve accounts referred to below and any additional security, and (ii) to certain minimum liquidity restrictions requiring us to maintain certain blocked and free liquidity cash balances with the lender, to maintain and gradually fund certain dry-dock reserve accounts in order to ensure the payment of any costs incurred in relation to the next dry-docking of each mortgaged vessel, as well as to certain customary, for this type of facilities, negative covenants. The credit agreement governingMoreover, the $15.3facility contains certain financial covenants requiring the Company as guarantor to maintain (i) a ratio of net debt to assets adjusted for the market value of our fleet of vessels, to net interest expense ratio above a certain level, (ii) an amount of unencumbered cash above a certain level and, (iii) our trailing 12 months EBITDA to net interest expense ratio not to fall below a certain level.
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Aframax/LR2 Tanker Segment Credit Facilities
$18.0 Million Term Loan Facility
On April 27, 2021, two of our wholly owned tanker vessel ship-owning subsidiaries, Rocket Shipping Co. and Gamora Shipping Co., entered into a $18.0 million senior secured term loan facility with Alpha Bank S.A. The facility was drawn down in two tranches on May 7, 2021. This facility has a term of four years from the drawdown date, bears interest at a 3.20% margin over LIBOR per annum and is repayable in (a) sixteen (16) quarterly instalments (1 to 4 in the amount of $850,000 and 5 to 16 in the amount of $675,000) and (b) a balloon installment in the amount of $6.5 million payable at maturity.
The above facility is secured by first preferred mortgage and first priority general assignment covering earnings, insurances and requisition compensation over the vessels owned by the borrowers (the Wonder Sirius and the Wonder Polaris), an earnings account pledge, shares security deed relating to the shares of the vessels’ owning subsidiaries, manager’s undertakings and is guaranteed by Castor. The facility also requires maintenancecontains certain customary minimum liquidity restrictions and financial covenants that require the borrowers to (i) maintain a certain amount of a minimum liquidity deposit per collateralized vessel (pledged in favor of the lender during the security coverperiod), and, (ii) meet a specified minimum security requirement ratio, beingwhich is the ratio of the aggregate amount of (i) the fair market value of the collateral mortgaged vessels (ii)plus the value of any additional security and the value of the Liquidity Accounts, (iii) the value of the Dry-dock Reserve Accounts and (iv) any additional security provided, overminimum liquidity deposits referred to above to the aggregate principal amount outstanding ofamounts due under the loan.facility.
The Company intends to use the net proceeds from the $15.3 Million Term Loan Facility to support the Company's growth plans and for general corporate purposes.
Cash Flows
The following table summarizes our net cash flows from operating, investing and financing activities for the years ended December 31, 20202021, and 2019:
 For the year ended 
(In US Dollars)December 31, 2019 December 31, 2020 
Net cash provided by/ (used in) operating activities  2,311,962   (2,343,809)
Net cash used in investing activities  (17,227,436)  (35,472,173)
Net cash provided by financing activities  18,087,133   42,183,946 

2020:
(in U.S Dollars) For the year ended 
  December 31, 2020  December 31, 2021 
Net cash (used in)/provided by operating activities  
(2,343,809
)
  
60,775,327
 
Net cash used in investing activities  
(35,472,173
)
  
(348,640,707
)
Net cash provided by financing activities  
42,183,946
   
321,824,945
 

Operating Activities: Net cash provided by operating activities amounted to $60.8 million for the year ended December 31, 2021, consisting of net income after non-cash items of $65.1 million and a working capital cash decrease of $4.3 million. For the year ended December 31, 2020, net cash used in operating activities amounted to $2.3 million, consisting of net income after non-cash items of $1.1 million less a decrease in working capital byof $3.4 million. ForThe $63.1 million increase, hence, in net cash from operating activities in the year ended December 31, 2019, net cash provided by operating activities amounted to $2.3 million, consisting2021, as compared with the same period of 2020 reflects mainly the increase in net income after non-cash items which was largely driven by the expansion of $2.0 million plus an increase in working capital of $0.3 million. The major driverour business and the improvement of the decrease in cash provided by/ (used in) operating activities ischarter rates earned by the increase in interest costs paid as discussed in "Item 5. Operating and Financial Review and Prospects", as compared to the fiscal year ended December 31, 2019, further impacted by (i) increased cash outflows related to dry-docking capitalized expenses by $1.3 million in 2020 compared to 2019, (ii) decreased cash inflows from trade receivables by $1.6 million and (iii) other negative cash flow variations in working capital accounts during the fiscal year ended December 31, 2020 as compared with the fiscal year ended December 31, 2019.dry bulk vessels of our fleet.

Investing Activities: Net cash used in investing activities amounting to $348.6 million for the year ended December 31, 2021, mainly reflects the cash outflows associated with (i) the vessel acquisitions we made during the period, as discussed in more detail under Note 6 of our audited consolidated financial statements included elsewhere in this annual report and (ii) the BWMS installations performed during 2021 on the Magic Vela and the Wonder Mimosa. Net cash used ininvesting activities inthe fiscal year ended December 31, 2020 reflects the cash outflows associated with (i) the acquisitions of the M/V Magic Rainbow, the M/V Magic Horizon and the M/V Magic Nova in the third and fourth quarters of 2020 and (ii) the BWMS installations on the M/V Magic P and the M/V Magic Sun.
Financing Activities: Net cash used in investingprovided by financing activities induring the fiscal year ended December 31, 2019 reflects2021 amounting to $321.8 million, relates to (i) the net proceeds raised under our registered direct equity offerings amounting to $156.9 million, (ii) the proceeds from the issuance of stock under our warrant schemes amounting to $83.4 million, (iii) the net proceeds from the issuance of stock pursuant to our Second ATM Program amounting to $12.5 million, (iv) the $95.3 million net proceeds related to the $15.29 million term loan facility, the $18.0 million term loan facility, the $40.75 million term loan facility, and the $23.15 million term loan facility (as further discussed above and further under Note 7 of our consolidated financial statements included elsewhere in this report), as offset by (v) the $14.4 million cash outflows associated with the acquisitionredemption of the M/V Magic Sun in September 2019Series A Preferred Shares, (vi) $6.9 million of period scheduled principal repayments under our existing secured credit facilities and (vii) the repayment, at its extended maturity, of the M/V Magic Moon in October 2019.$5.0 million term loan facility.
Financing Activities:
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Net cash from financing activities of $42.2 million for the year ended December 31, 2020 consisted of (i) the net cash proceeds received pursuant to the 2020 June Equity Offering and the 2020 July Equity Offering (as described in “— Liquidity and Capital Resources (“Equity Transactions”)”)  amounting to $35.3 million, (ii) proceeds of $9.5 million in the period from the $5.0 Million Convertible Debenturesmillion convertible debentures and the Chailease Financial Services Facility,$4.5 million term loan facility (see “—Our Borrowing Activities” for full terms), (iii) principal scheduled repayments under our credit facilities amounting to $2.0 million and (iv) payment of deferred finance costs in connection with the closing of our debt agreements in an aggregate amount of $0.6 million.
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C.Research and Development, Patents and Licenses, Etc.
Not applicable.
D.Trend Information
Our results of operations depend primarily on the charter hire rates that we are able to realize. Charter hire rates paid for dry bulk and tanker vessels are primarily a function of the underlying balance between vessel supply and demand. For a discussion regarding the market performance, please see "Item“Item 5. Operating and Financial Review and Prospects—A. Operating Results—Cyclical Nature of the Industry".Industry.”
While global trade is likely to continue to grow, we expect the overcapacity in the shipping market to come to a stop and, therefore, no longer exert the considerable pressure that it did on charter rates in recent years.
There can be no assurance as to how long charter rates will remain at their current levels or whether they will improve or deteriorate and, if so, when and to what degree. Charter ratesThat may remain at current levels for some time, which may adversely affecthave a material adverse effect on our future growth potential and our profitability. Also, the Company'sCompany’s business could be materially and adversely affected by the risks, or the public perception of the risks and travel restrictions related to the COVID-19 pandemic. The Company is unable to reasonably predict the estimated length or severity of the COVID-19 pandemic on future operating results.
E.Off Balance Sheet Arrangements
As of December 31, 2020, we did not have any off-balance sheet arrangements.
F.Tabular Disclosure of Contractual Obligations
The following table sets forth our contractual obligations and their maturity dates as of December 31, 2020:
     Payments due by period 
Obligations Total  Less than 1 year  1-3 years  3-5 years  More than 5 years 
Long-term debt $18,450,000  $7,200,000  $4,400,000  $6,850,000  $- 
Interest on long-term debt (1)
  1,539,058   557,163   744,892   237,003   - 
Administration fees - Castor Ships (2)
  5,600,000   1,200,000   2,400,000   2,000,000   - 
Management fees- Pavimar & Castor Ships (2)
  8,690,400   1,861,500   3,723,000   3,105,900   - 
Capital expenditures related to BWMS purchases (3)
  849,122   495,871   353,251   -   - 
Total $35,128,580  $11,314,534  $11,621,143  $12,192,903  $- 
__________________________
(1)Our variable rate long-term debt outstanding as of December 31, 2020 bears variable interest at a margin over LIBOR. The calculation of interest payments has been made assuming interest rates based on the LIBOR specific to our variable rate credit facilities as of December 31, 2020, and our applicable margin rate.
(2)For further discussion on our contractual relationship with our managers, please see "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions".
(3)Our calculation of the contractual obligations related to BWMS purchases as of December 31, 2020 excludes installation costs and other unforeseen costs that we might incur as part of the systems' installation and has been made on the basis of a Euro/US Dollar exchange rate of €1.0000/$1.2271 as of December 31, 2020. For further discussion regarding the respective commitments, please see section Capital Expenditures above.
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G.Safe Harbor
Please see "Cautionary Statement Regarding Forward Looking Statements" at the beginning of this annual report.
Critical Accounting Estimates
We prepare our financial statements in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our consolidated financial statements are presented fairly and in accordance with U.S. GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material. For a description of our material accounting policies, please read "Item“Item 18. Financial Statements"Statements” and more precisely "Note“Note 2. Summary of Significant Accounting Policies" Policies” of our Consolidated Financial Statements.consolidated financial statements included elsewhere in this annual report.
Vessels' Depreciation
We record the value of our dry bulk vessels at their cost (which includes the contract price plus any direct expenses incurred upon acquisition, including improvements, delivery expenses and other expenditures to prepare the vessel for its initial voyage) less accumulated depreciation. Subsequent expenditures for conversions and major improvements are also capitalized when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of a vessel; otherwise these amounts are charged to expense as incurred. Depreciation is calculated on a straight-line basis over the vessels' remaining economic useful life, estimated to be 25 years from the date of initial delivery from the shipyard, after considering the estimated residual value. Residual value is estimated by taking an estimated steel scrap rate times the weight of the ship noted in lightweight ton. Residual values are periodically reviewed and revised, if needed, to recognize changes in conditions, new regulations or for other reasons. Changes in the useful life of a vessel or in its residual value affect the depreciable amount of the vessels and affect the depreciation expense in the period of the revision and in future periods. Our vessels, being secondhand vessels, are depreciated from the date of their acquisition through their remaining estimated useful life. The assumptions inherent in the calculation of vessels' depreciation are based on current and historical market trends. We do not expect these assumptions to change in the near future unless market trends will indicate otherwise. When regulations place limitations over the ability of a vessel to trade on a worldwide basis, its remaining useful life is adjusted at the date such regulations become effective.
Vessel Lives and Impairment
The carrying value of each of our vessels represents its original cost (contract price plus any direct expenses incurred upon acquisition, including improvements, delivery expenses and other expenditures to prepare the vessel for its intended use) at the time of delivery or purchase less accumulated depreciation. Subsequent expenditures for conversions and major improvements are also capitalized when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of a vessel; otherwise these amounts are charged to expense as incurred.
The Company reviews for impairment its long-lived assets held and used whenever events or changes in circumstances (such as market conditions, obsolesce or damage to the asset, potential sales and other business plans) indicate that the carrying amount of the assets may not be recoverable. When the estimate of undiscounted cash flows, excluding interest charges, expected to be generated by the use of the asset is less than its carrying amount, we are required to evaluate the asset for an impairment loss. Measurement of the impairment loss is based on the fair value of the asset.
The carrying values of our vessels may not represent their fair market value at any point in time since the market prices of second-hand vessels tend to fluctuate with changes in charter rates and the cost of newbuilds. Historically, both charter rates and vessel values tend to be cyclical.
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The table below specifies (i) the carrying value of each of our vessels as of December 31, 2020 and 2019 and (ii) which of those vessels we believe had a charter-free market value below its carrying value. We believe that the aggregate carrying value of the vessels indicated with an asterisk below exceeded their aggregate basic charter-free market value by approximately $0.8 million as of December 31, 2020. This aggregate difference represents the approximate analysis of the amount by which we believe we would have to reduce our net loss if we sold all of such vessels in the current environment, on industry standard terms, in cash transactions, to a willing buyer in circumstances where we are not under any compulsion to sell, and where the buyer is not under any compulsion to buy. For purposes of this calculation, we have assumed that the vessels would be sold at a price that reflects our estimate of their current basic market values.
Our estimates of basic market value assume that the vessels are all in good and seaworthy condition without need for repair and, if inspected, would be certified in class without notations of any kind. Our estimates are based on the estimated market values for the vessels received from a third-party independent shipbroker approved by our financing providers. Vessel values are highly volatile. Accordingly, as such, our estimates may not be indicative of the current or future basic market value of the vessels or prices that could be achieved if the vessels were to be sold.
Vessels Date acquired Carrying value as of
December 31, 2020
(in millions of United
States dollars)		  Carrying value as of
December 31, 2019
(in millions of United
States dollars)		 
Magic P21/02/2017 $6.8  $6.7 
Magic Sun05/09/2019 $6.9* $6.8 
Magic Moon20/10/2019 $9.6* $10.2 
Magic Rainbow08/08/2020 $8.0  $- 
Magic Horizon09/10/2020 $12.9  $- 
Magic Nova15/10/2020 $13.8  $- 
Total  $58.0  $23.7 
______________________
* Indicates
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As of December 31, 2021, the charter-free market value of all our vessels exceeded their carrying value, thus, no undiscounted cash flow tests were deemed necessary to be performed for which we believe that, asany of our vessels. As of December 31, 2020, the aggregate carrying value of certain of our vessels exceeded thetheir aggregate basic charter-free market value. As discussed below, wevalue by approximately $0.8 million. We believe that the carrying values of our vessels whose carrying value exceeded its fair value as of December 31, 2020 and 2019 were recoverable as the undiscounted projected net operating cash flows of these vessels exceeded their carrying value by a significant amount.
We performedperform undiscounted cash flow tests as of December 31, 2020,when necessary, as an impairment analysis, in which we made estimates and assumptions relating to determining the projected undiscounted net operating cash flows by considering the following:
the charter revenues from existing time charters for the fixed fleet days;
estimated vessel operating expenses and voyage expenses;
estimated dry-docking expenditures;
an estimated gross daily charter rate for the unfixed days (based on the ten-year average of the historical six-months and one-year time charter rates available for each type of vessel) over the remaining economic life of each vessel, excluding days of scheduled off-hires and net of  commissions;
residual value of vessels;
commercial and technical management fees;
an estimated utilization rate; and
the remaining estimated life of our vessels.
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The net operating undiscounted cash flows are then compared with the vessels'vessels’ net book value plus unamortized dry-docking costs. The difference, if any, between the carrying amount of the vessel plus unamortized dry-docking costs and their fair value is recognized in the Company'sCompany’s accounts as impairment loss.
Although we believe that the assumptions used to evaluate potential impairment, which are largely based on the historical performance of our fleet, are reasonable and appropriate, such assumptions are highly subjective. There can be no assurance as to how charter rates and vessel values will fluctuate in the future. Charter rates may, from time to time throughout our vessels'vessels’ lives, remain for a considerable period of time at depressed levels which could adversely affect our revenue and profitability, and future assessments of vessel impairment.
Our assumptions, based on historical trends, and our accounting policies are as follows:
in accordance with the prevailing industry standard, depreciation is calculated using an estimated useful life of 25 years for our vessels, commencing at the date the vessel was originally delivered from the shipyard;
estimated useful life of vessels takes into account commercial considerations and regulatory restrictions;
estimated charter rates are based on rates under existing vessel contracts and thereafter at market rates at which we expect we can re-charter our vessels based on market trends. We believe that the ten-year average historical time charter rate is appropriate (or less than ten years if appropriate data is not available) for the following reasons:
•          it reflects more accurately the earnings capacity of the type, specification, deadweight capacity and average age of our vessels;
•          it reflects the type of business conducted by us (period as opposed to spot);
•         it is an appropriate period to capture the volatility of the market and includes at least onenumerous market cycle;highs and lows so as to be considered a fair estimate based on past experience; and
•          respective data series are adequately populated.
estimates of vessel utilization, including estimated off-hire time are based on the historical experience of our fleet;
estimates of operating expenses and dry-docking expenditures are based on historical operating and dry-docking costs based on the historical experience of our fleet and our expectations of future operating requirements;
vessel residual values are a product of a vessel'svessel’s lightweight tonnage and an estimated scrap rate; and
the remaining estimated lives of our vessels used in our estimates of future cash flows are consistent with those used in our depreciation calculations.
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The impairment test that we conduct, when required, is most sensitive to variances in future time charter rates. Based on the sensitivity analysis performed for December 31, 2020, we would begin recording impairment on the first vessel that will incur impairment if time charter declines by 7% from their ten-year historical averages.
Based on the above assumptions we determined that the undiscounted cash flows support the vessels' carrying amounts as of December 31, 2020.
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ITEM 6.DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A.Directors and Senior Management
Set forth below are the names, ages and positions of our directors and executive officer. Our Board currently consists of three directors and is elected annually on a staggered basis, and each director elected holds office for a three-year term. The business address of each of our directors and executive officer listed below is Castor Maritime Inc., 223 Christodoulou Chatzipavlou Street, Hawaii Royal Gardens, 3036 Limassol, Cyprus.
Name Age Position
Petros Panagiotidis 3132 Chairman, Chief Executive Officer, Chief Financial Officer, President, Treasurer and Class C Director
Dionysios Makris 4041 Secretary and Class B Director
Georgios Daskalakis 3132 Class A Director


Certain biographical information with respect to each director and senior management of the Company listed above is set forth below.
Petros Panagiotidis, Chairman, Chief Executive Officer, Chief Financial Officer, President, Treasurer and Class C Director
Petros Panagiotidis, is the founder of Castor Maritime Inc. He has been serving as the Company’s Chairman of the Board, Chief Executive Officer and Chief Financial Officer since our inception in 2017. During his years with Castor Maritime he has been actively engaged in the successful company’s listing on the NASDAQ Capital Market in February 2019. He is responsible for the implementation of our business strategy and the overall management of our affairs. Prior to founding Castor Maritime, he gained extensive experience working in shipping and investment banking positions focused on operations, corporate finance and business management. He holds a bachelor’s degree in International Studies and Mathematics from Fordham University and a Master’s Degree in Management and Systems from the New York University.


Dionysios Makris, Secretary and Class B Director
Dionysios Makris has been a non-executive member and Secretary of our Board since ourthe Company’s establishment in September 2017.2017 and currently serves as a member of the Company’s Audit Committee. He is a lawyer and has been a member of the Athens Bar Association since September 2005. He is currently based in Piraeus, Greece and is licensed to practice law before the Supreme Court of Greece. He practices mainly shipping and commercial law and is involved in both litigation and transactional practice. He holds a Bachelor of Laws degree from the Law School of the University of Athens, Greece and a Master of Arts degree in International Relations from the University of Warwick, United Kingdom.
Georgios Daskalakis, Class A Director
Georgios Daskalakis has been a non-executive member of our Board since our establishment in September 2017. He has invested all of his professional life in the shipping industry2017 and held various positions for different prominent companies. From 2013 to 2015, he was an insurance officer at Minerva Marine Inc.  Later on, from 2015 to 2017, he served as an operator of tanker vessels at Trafigura Maritime Logistics PTE Ltd. He is currently the chairman of our Audit Committee. Mr. Daskalakis has been employed atsince 2017 by M/Maritime Corp., a dry cargo management company, holding a number of senior positions. As of today, he has been with since 2017 and in which he has held several positions. Currently, he serves as ais the Chief Commercial Officer and Chairman of the Board of Directors.Directors at M/Maritime. Prior to that he was employed in various roles in the shipping industry with Minerva Marine Inc, a major Greece based diversified shipping entity and Trafigura Maritime Logistics PTE Ltd. He holds a Bachelor'sBachelor’s degree from Babson College with a concentration on Economics and Finance as well asfollowed by a Master of Science degree in Shipping, Trade and Finance from the Costas Grammenos Centre for Shipping, Trade and Finance, Cass Business School, City University of London.
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B.Compensation
Compensation of Directors
The compensation payable to our Chairman, Chief Executive Officer and Chief Financial Officer for the years ended December 31, 2020, and December 31, 2019, which includes the three-month transition period ended December 31, 2018, amounted to $0.01 million and $0.01 million, respectively. Effective October 1, 2020, we terminated the compensation payments towards our Chief Executive Officer and Chief Financial Officer. Subsequent to the termination of our executive compensation payments, the services rendered by our Chairman, Chief Executive Officer and Chief Financial Officer for the year ended December 31, 2021, are included in our master agreement with Castor Ships described under "Item“Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions",Transactions” below. For the year ended December 31, 2020,2021, we paid our non-executive directors fees in the aggregate amount of $20,000$48,000 per annum, or $10,000$24,000 per director per annum, plus reimbursement for their out-of-pocket expenses. We did not pay our non-executive directors any compensation since our inception until December 31, 2019. Our Chief Executive Officer and Chief Financial Officer who also serves as our director does not receive additional compensation for his service as director.
C.Board Practices
Our Board currently consists of three directors and is elected annually on a staggered basis. Each director elected holds office for a three-year term or until his successor is duly elected and qualified, except in the event of his death, resignation, removal or the earlier termination of his term of office. At our annual meeting of shareholders held on November 25, 2020,30, 2021, our shareholders re-elected our Class CA director to serve until the annual meeting of shareholders to be held in 2023 and approved the granting of discretionary authority to our Board to effect one or more reverse stock splits of our issued common shares, at a ratio of not less than one-for-two and not more than one-for-75 and in the aggregate at a ratio of not more than one-for-75, inclusive, with the exact ratio to be set at a whole number within this range to be determined by the Board, or any duly constituted committee thereof.2024. The term of office of our Class A director expires at the annual meeting of shareholders to be held in 2021, and the term of office our Class B director expires at the annual meeting of shareholders to be held in 2022.2022, and the term of office our Class C director expires at the annual meeting of shareholders to be held in 2023. Officers are appointed from time to time by our Board and hold office until a successor is appointed. Our directors do not have service contracts and do not receive any benefits upon termination of their directorships.
Our audit committee is comprised of our independent directors, Mr. Dionysios Makris and Mr. Georgios Daskalakis. Our Board has determined that the members of the audit committee meet the applicable independence requirements of the Commission and the Nasdaq Stock Market Rules. Our Board has determined that Mr. Georgios Daskalakis is an "Audit“Audit Committee Financial Expert"Expert” under the Commission'sCommission’s rules and the corporate governance rules of the Nasdaq Stock Market. The audit committee is responsible for our external financial reporting function as well as for selecting and meeting with our independent registered public accountants regarding, among other matters, audits and the adequacy of our accounting and control systems. Our audit committee is also responsible for reviewing all related party transactions for potential conflicts of interest and all related party transactions are subject to the approval of the audit committee.
D.Employees
As of the date of this annual report, Mr. Petros Panagiotidis, holding the positions of Chairman, Chief Executive Officer and Chief Financial Officer, is our only employee.
E.Share Ownership
With respect to the total amount of common shares owned by all of our officers and directors individually and as a group, please see "Item“Item 7. Major Shareholders and Related Party Transactions".Transactions” Please also see "Item“Item 10. Additional Information—B. Memorandum and Articles of Association"Association” for a description of the rights of holders of our Series B Preferred Shares relative to the rights of holders of shares of our common stock.shares.
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ITEM 7.MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A.Major Shareholders
Based on information available to us, including information contained in public filings, as of March 26, 2021,the date of this annual report, there were no beneficial owners of 5% or more of our common shares. The following table sets forth certain information regarding the beneficial ownership of common shares and Series B Preferred Shares of all of our directors and officers as of March 26, 2021.the date of this annual report.
All
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The percentage of beneficial ownership is based on 707,157,93694,610,088 common shares outstanding as of March 26, 2021.28, 2022.
Name of Beneficial OwnerNo. of Common Shares Percentage 
All executive officers and directors as a group (1) (2)
  -   -%
______________________
(1)Neither any member of our Board of Directors or executive officer individually, nor all of them taken as a group, hold more than 1% of our outstanding common shares.
(2)Petros Panagiotidis owns 1,124,094 common shares and 12,000 Series B Preferred Shares (representing all such Series B Preferred Shares outstanding, each Series B Preferred Share having the voting power of one hundred thousand (100,000) common shares). Please see "Item 10. Additional Information—B. Memorandum and Articles of Association" for a description of the rights of holders of our Series B Preferred Shares relative to the rights of holders of shares of our common stock.
(1)          Neither any member of our Board of Directors or executive officer individually, nor all of them taken as a group, hold more than 1% of our outstanding common shares.
(2)         Petros Panagiotidis holds 112,409 common shares and 12,000 Series B Preferred Shares (representing all such Series B Preferred Shares outstanding, each Series B Preferred Share having the voting power of one hundred thousand (100,000) common shares). Please see “Item 10. Additional Information—B. Memorandum and Articles of Association” for a description of the rights of holders of our Series B Preferred Shares relative to the rights of holders of our common shares.
All of our common shareholders are entitled to one vote for each common share held. As of March 25, 2022 there were 91 holders of record of our common shares, 2 of which have a U.S. mailing address. One of these holders is CEDE & Co., a nominee company for The Depository Trust Company, which held approximately 99.8% of our outstanding common shares as of such date. The beneficial owners of the common shares held by CEDE & Co. may include persons who reside outside the United States.
B.Related Party Transactions
From time to time, we have entered into agreements and have consummated transactions with certain related parties. We may enter into related party transactions from time to time in the future.
Management, Commercial and Administrative Services
Our vessels are technically managed by Pavimar, a company controlled by Ismini Panagiotidis, the sister of our Chairman, Chief Executive Officer and Chief Financial Officer, Petros Panagiotidis. Under the technical management agreements, our ship-owning subsidiaries pay a $600 daily fee to Pavimar for the provision of a wide range of shipping services such as crew management, technical management, operational employment management, insurance arrangements,management, provisioning, bunkering, accounting and audit support services, which it may choose to subcontract to other parties at its discretion. As of December 31, 2021, Pavimar had subcontracted the technical management of three of the Company’s dry bulk vessels and onenine of our wholly-owned subsidiaries have entered into a management agreement with Fleet Ship Management Inc. ("Fleet Ship"), aits tanker vessels to third-party ship-management company, pursuant to which Fleet Ship provides technical management to the M/V Magic Nova.companies. Pavimar pays, at its own expense, Fleet Shipthese third-party management companies a fee for the services it has subcontracted to it,them, without burdening the Company with any additional cost. The technical management agreements have a term of five years and such term automatically renews for a successive five-year term on each anniversary of their effective date, unless the agreements are terminated earlier in accordance with the provisions contained therein. In the event that the Pavimar management agreements are terminated by the ship-owning subsidiaries other than by reason of default by Pavimar, a termination fee equal to four times the total amount of the daily management fee calculated on an annual basis shall be payable from the ship-owning subsidiaries to Pavimar. The technical management agreements also provide that the management fees shall be subject to an annual review on their anniversary.
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Our vessels are commercially managed by Castor Ships, a company controlled by our Chairman, Chief Executive Officer and Chief Financial Officer. Castor Ships manages our business overall and provides us with commercial, chartering and administrative services, including, but not limited to, securing employment for our Fleet,fleet, arranging and supervising the vessels'vessels’ commercial operations, handling all of the Company'sCompany’s vessel sale and purchase transactions, undertaking related shipping project and management advisory and support services, as well as other associated services requested from time to time by us and our ship-owning subsidiaries. In exchange for these services, we and our subsidiaries pay Castor Ships (i) a flat quarterly management fee in the amount of $0.3 million for the management and administration of our business, (ii) a daily fee of $250 per vessel for the provision of commercial services, (iii) a commission rate of 1.25% on all charter agreements and (iv) a commission of 1% on each sale and purchase transaction. The Castor Ships management agreements have a term of five years and such term automatically renews for a successive five-year term on each anniversary of the effective date, unless the agreements are terminated earlier in accordance with the provisions contained therein. In the event that the Castor Ships management agreements are terminated by the Company, or are terminated by Castor Ships due to a material breach of the master management agreement by the Company or a change of control in the Company (including the disposal of all or substantially all of our assets, changes in key personnel such as our current directors or Chief Executive Officer or a determination by our board of directors that a change of control has  occurred), Castor Ships shall be entitled to a termination fee equal to four times the total amount of the flat management fee and the per vessel management fees calculated on an annual basis. The commercial ship management agreements with Castor Ships also provide that the management fees shallmay be subject to an annual review on their anniversary.
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For further information, please refer to Note 3 of our audited consolidated financial statements included elsewhere in this annual report.

Vessel AcquisitionAcquisitions
On October 14, 2019,December 17, 2021, we entered into, through a separate wholly-ownedwholly owned subsidiary, an agreement to purchase a 2005 Japan2012 Japanese built Panamax dry bulk carrier, the Magic Moon,Callisto, for a purchase price of $10.2$23.55 million from a third party in which a family member of our Chairman, Chief Executive Officer and Chief Financial Officer hashad an interest. The Magic Callisto was delivered to us on January 4, 2022. The terms of the transaction were negotiated and approved by a special committee of disinterested and independent directors of the Company.
Loans
$5.0 Million Term Loan Facility
On August 30, 2019, we entered into thea $5.0 Million Term Loan Facilitymillion term loan facility with Thalassa, an entity affiliated with Petros Panagiotidis.Panagiotidis, which was repaid in full on September 3, 2021. Please see "Item 5 –“Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources – Resources—Our Borrowing Activities"Activities” for more information about the $5.0 Million Term Loan Facility.information.
$7.5 Million Shareholder Bridge Loan
On October 20, 2019, we took delivery of the Magic Moon that was purchased for $10.2 million from a third party in which a family member of Petros Panagiotidis has an interest. The purchase of the Magic Moon was financed using a combination of cash on hand, the net cash proceeds from sales under our ATM Program received through September 30, 2019 and the proceeds from a $7.5 million interest free unsecured bridge loan, which was provided to us by an entity controlled by Petros Panagiotidis, or the $7.5 Million Shareholder Bridge Loan. The $7.5 Million Shareholder Bridge Loan, originally maturing on December 31, 2019, allowed us to timely partly finance the Magic Moon acquisition while in the meantime assessing financing options for our Fleet. Our Board and a special committee consisting of disinterested and independent members of the Board approved the $7.5 Million Shareholder Bridge Loan. On December 6, 2019, we repaid the $7.5 Million Shareholder Bridge Loan in full by partially using the net proceeds received under the Alpha Bank Facility, further discussed under "Item 5 –Liquidity and Capital Resources – Our Borrowing Activities".
2019 Commercial Services
During 2019, we occasionally used the commercial services of Alexandria Enterprises S.A., ("Alexandria") an entity controlled by a family member of the Company's Chairman, Chief Executive Officer and Chief Financial Officer. In exchange for these services, Alexandria charged the Company a commission rate equal to 1.25% of the gross charter hire, freight and the ballast bonus earned under a charter agreement. During the year ended December 31, 2019, commissions charged by Alexandria amounted to $40,471. We did not incur any charges from Alexandria during the year ended December 31, 2020 and we no longer use the services of Alexandria.
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C.Interests of Experts and Counsel
Not applicable.

ITEM 8.FINANCIAL INFORMATION
A.Consolidated Statements and other Financial Information
Please see "Item“Item 18. Financial Statements"Statements.”
Legal Proceedings
To our knowledge, we are not currently a party to any lawsuitlegal proceedings that, if adversely determined, would have a material adverse effect on our financial position,condition results of operations or liquidity. As such, we do not believe that pending legal proceedings, taken as a whole, should have any significant impact on our financial statements. FromWe are, and from time to time in the future, we may be subject to legal proceedings and claims in the ordinary course of business, principally personal injury and property casualty claims. While we expect that these claims would be covered by our existing insurance policies, those claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources. We have not been involved in any legal proceedings which may have, or have had, a significant effect on our financial position, results of operations or liquidity, nor are we aware of any proceedings that are pending or threatened which may have a significant effect on our financial position, results of operations or liquidity.
Dividend Policy
Under our Bylaws, our Board may declare and pay dividends in cash, stock or other property of the Company. Any dividends declared will be in the sole discretion of the Board and will depend upon earnings, restrictions in any of our agreements, market prospects, current capital expenditure programs and investment opportunities, the provisions of Marshall Islands law affecting the payment of distributions to shareholders and other factors.
Any dividends paid by us may be treated as ordinary income to a U.S. shareholder. Please see the section entitled "Item 10. Additional Information—E. Taxation—U.S. Federal Income Tax Considerations—U.S. Federal Income Taxation of U.S. Holders—Distributions" for additional information relating to the U.S. federal income tax treatment of our dividend payments, if any are declared in the future.
In addition, we may incur expenses or liabilities, including extraordinary expenses, decreases in revenues, including as a result of unanticipated off-hire days or loss of a vessel, or increased cash needs that could reduce or eliminate the amount of cash that we have available for distribution as dividends. The dry bulk and tanker charter markets are cyclical and volatile. We cannot predict with accuracy the amount of cash flows our operations will generate in any given period. Factors beyond our control may affect the charter market for our vessels and our charterer's ability to satisfy their contractual obligations to us, and we cannot assure you that dividends will actually be declared or paid in the future. We are a recently formed company and have a limited performance record and operating history. Accordingly, we cannot assure you that we will be able to pay dividends at all, and our ability to pay dividends will be subject to the limitations set forth abovebelow and under “Item 3. Risk Factors—Risks Relating to our Common Shares¾Our Board may never declare dividends.”
Under our Bylaws, our Board may declare and pay dividends in cash, stock or other property of the Company. Any dividends declared will be in the section of this annual report titled "Risk Factors".
Dividends on our Series A Preferred Shares accrue and are cumulative starting on January 1, 2022 and are payable on each June 15 and December 15, when, as and if declared by our Board or any authorized committee thereof out of legally available funds for such purpose. The dividend rate for our Series A Preferred Shares is 9.75% per annum per share. Please see the section herein "Item 10. Additional Information —B. Memorandum and Articles of Association —Description of Series A Preferred Shares" for a descriptionsole discretion of the dividend termsBoard and will depend upon factors such as earnings, increased cash needs and expenses, restrictions in any of our agreements (including our current and future credit facilities), overall market conditions, current capital expenditure programs and investment opportunities, and the Series A Preferred Shares.provisions of Marshall Islands law affecting the payment of distributions to shareholders (as described below). The foregoing is not an exhaustive list of factors which may impact the payment of dividends.
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Marshall Islands law provides that we may pay dividends on and redeem any shares of capital stock including the Series A Preferred Shares, only to the extent that assets are legally available for such purposes. Legally available assets generally are limited to our surplus, which essentially represents our retained earnings and the excess of consideration received by us for the sale of shares above the par value of the shares. In addition, under Marshall Islands law, we may not pay dividends on or redeem any shares of capital stock including the Series A Preferred Shares, if we are insolvent or would be rendered insolvent by the payment of such a dividend or the making of such redemption.
Any dividends paid by us may be treated as ordinary income to a U.S. shareholder. Please see the section entitled “Item 10. Additional Information—E. Taxation—U.S. Federal Income Tax Considerations—U.S. Federal Income Taxation of U.S. Holders—Distributions” for additional information relating to the U.S. federal income tax treatment of our dividend payments, if any are declared in the future.
We have not paid any dividends to our shareholders as of the date of this annual report.
B.Significant Changes
Not applicable.

ITEM 9.THE OFFER AND LISTING
A.Offer and Listing Details
Our common shares currently trade on the Nasdaq Capital Market under the symbol “CTRM” and on the Norwegian OTC, or the NOTC, under the symbol "CASTOR" and on the Nasdaq Capital Market under the symbol "CTRM"“CASTOR”.
B.Plan of Distribution
Not applicable.
C.Markets
Please see "Item 9.“—A. The Offer and Listing—A. Offer and Listing Details".Details.”
D.Selling Shareholders
Not applicable.
E.Dilution
Not applicable.
F.Expenses of the Issue
Not applicable.

ITEM 10.ADDITIONAL INFORMATION
A.Share Capital
Not applicable.
B.Memorandum and Articles of Association
Articles of Association and Bylaws
The following is a description of material terms of our Articlesarticles of Incorporationincorporation and bylaws. Because the following is incorporated by reference froma summary, it does not contain all information that you may find useful. For more complete information, you should read our registration statement on Form F-4 (Registration No. 333-224242),articles of incorporation and our bylaws, as amended, copies of which was filed with the Securities and Exchange Commission on April 11, 2018. Our Articles of Incorporation wereare filed as Exhibit 3.1exhibits to the F-4 Registration Statement and are hereby incorporated by reference into this annual report.

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Purpose
Our purpose is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the Marshall Islands Business Corporations Act, or BCA. Our amended and restated Articles of Incorporation and Bylaws do not impose any limitations on the ownership rights of our shareholders.
Authorized Capitalization
Under our Articles of Incorporation, our authorized capital stock consists of 1,950,000,000 common shares, par value $0.001 per share, of which 707,157,93694,610,088 common shares were issued and outstanding as of March 26, 2021,28, 2022, and 50,000,000 preferred shares, par value $0.001 per share, of which 480,000 Series A Preferred Shares and 12,000 Series B Preferred Shares are currently issued and outstanding.
Description of Common Shares
Each outstanding common share entitles the holder to one vote on all matters submitted to
For a vote of shareholders. Subject to preferences that may be applicable to any outstanding preferred shares, holders of common shares are entitled to receive ratably all dividends, if any, declared by our Board out of funds legally available for dividends. Upon our dissolution or liquidation or the sale of all or substantially all of our assets, after payment in full of all amounts required to be paid to creditors and to the holders of preferred shares having liquidation preferences, if any, the holdersdescription of our common shares, are entitled to receive pro rata our remaining assets available for distribution. Holderssee Exhibit 2.2 (Description of common shares do not have conversion, redemption or pre-emptive rights to subscribe to any of our securities. The rights, preferences and privileges of holders of our common shares are subject to the rights of the holders of any preferred shares, which we have issued in the past or which we may issue in the future.Securities).
Share History
On September 22, 2017, we entered into an exchange agreement, or the Exchange Agreement, with Spetses Shipping Co., or Spetses, and its shareholders. Under the terms of the Exchange Agreement, we issued 2,400,000 common shares, 480,000 Series A Preferred Shares and 12,000 Series B Preferred Shares of the Company in exchange for all of the issued and outstanding common shares of Spetses.
On November 21, 2017, we declared a dividend of one preferred share purchase right for each outstanding common share and adopted a shareholder rights plan, as set forth in a Stockholders Rights Agreement dated as of November 20, 2017, by and between us and American Stock Transfer & Trust Company, LLC, as rights agent. For more information, please see "Stockholders Rights Agreement" below. In connection with the Stockholders Rights Agreement, we designated 3,000 shares as Series C Participating Preferred Shares, none of which are outstanding as of the date of this annual report.
Please see "Item“Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Equity Issuances"Transactions” for a description of the Company'sCompany’s equity issuances.transactions.
Preferred Shares
Our Articles of Incorporation authorize our Board to establish one or more series of preferred shares and to determine, with respect to any series of preferred shares, the terms and rights of that series, including:
the designation of the series;
the number of shares of the series;
the preferences and relative, participating, option or other special rights, if any, and any qualifications, limitations or restrictions of such series; and
the voting rights, if any, of the holders of the series.
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Description of Series A Preferred Shares
On September 22, 2017,December 8, 2021, pursuant to a decision approved by our Board of Directors on November 8, 2021, we redeemed all of the issued 480,000 shares ofand outstanding Series A Preferred Shares topreferred shares. Based on the shareholdersamended and restated statement of Spetses, under the Exchange Agreement. Ondesignations of Castor dated October 10, 2019, we adopted the Amended and Restated Statement of Designationsholders of the Series A Preferred Shares.
Thepreferred shares received a cash redemption of $30.00 per Series A Preferred Shares entitle the holders thereof to receive cumulative cash dividends when, as and if declared by our Board out of legally available funds for such purpose. Each Series A Preferred Share has a fixed liquidation preference of $30.00 per share plus an amount equal to accumulated and unpaid dividends thereon to the date fixed for payment, whether or not declared. See "Liquidation Rights " below.
The Series A Preferred Shares represent perpetual equity interests in us and, unlike indebtedness, will not give rise to a claim for payment of a principal amount at a particular date. As such, the Series A Preferred Shares would rank junior to all of our indebtedness and other liabilities with respect to assets available to satisfy claims against us.
Ranking
The Series A Preferred Shares rank, with respect to dividend distributions and distributions upon the liquidation, winding-up and dissolution of our affairs, senior to our common shares, our Series B Preferred Shares and to each other class or series of capital stock established after the original issue date of the Series A Preferred Shares as to the payment of dividends and amounts payable upon liquidation, dissolution or winding up, whether voluntary or involuntary ("Junior Stock").
We may issue additional common shares, additional Series A Preferred Shares and Junior Stock. Except as described in the Series A Preferred Shares Statement of Designation, the Board has the authority to determine the preferences, powers, qualifications, limitations, restrictions and special or relative rights or privileges, if any, of any such series of Junior Stock before the issuance of any shares of that series. The Board shall also determine the number of shares constituting each series of securities.
Dividends
General
Holders of Series A Preferred Shares will be entitled to receive, when, as and if declared by our Board out of legally available funds for such purpose, cumulative cash dividends from January 1, 2022 (or, for any newly issued and outstanding shares, from the Dividend Payment Date immediately preceding the issuance date of such stock or for shares issued on or before June 14, 2022 then January 1, 2022). No dividends shall accrue or accumulate for the period from July 1, 2019 to December 31, 2021.
Dividend Rate
Dividends on Series A Preferred Shares will be cumulative and payable on each Dividend Payment Date, commencing on June 15, 2022, when, as and if declared by our Board or any authorized committee thereof out of legally available funds for such purpose. DividendsShare. For further information on the Series A Preferred Shares will accrue at a rate of 9.75% per annum per Series Aand their redemption, see Note 8 (“(b) Preferred Share having a value of $25.00 per share.
In the event that any semi-annual dividend payable on the Shares¾Series A Preferred Shares is in arrears, the Dividend Rate payable on the Series A Preferred Shares shall be increased a single time to a rate of 1.3 times the Dividend Rate for each Series A Preferred Share having a value of $25.00 per share until the Dividend Payment Default is cured.
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Dividend Payment Dates
The "Dividend Payment Dates" for the Series A Preferred Shares will be each June 15amendment and December 15, commencing June 15, 2022. Dividends will accumulate in each dividend period from and including the preceding Dividend Payment Date or the initial issue date, as the case may be, to but excluding the applicable Dividend Payment Date for such dividend period. If any Dividend Payment Date otherwise would fall on a day that is not a Business Day, declared dividends will be paid on the immediately succeeding Business Day without the accumulation of additional dividends. Dividends on the Series A Preferred Shares will be payable based on a 360-day year consisting of twelve 30-day months.
"Business Day" means a day on which Nasdaq is open for trading and which is not a Saturday, a Sunday or other day on which banks in New York City are authorized or required by law to close.
Payment of Dividends
Not later than 5:00 p.m., New York City time, on each Dividend Payment Date, we will pay those dividends, if any, on the Series A Preferred Shares that have been declared by our Board to the holders of such shares as such holders' names appear on our stock transfer books maintained at the Company or by the Registrar and Transfer Agent on the applicable Record Date. The applicable record date (the "Record Date"), will be the Business Day immediately preceding the applicable Dividend Payment Date, except that in the case of payments of dividends in arrears, the Record Date with respect to a Dividend Payment Date will be such date as may be designated by our Board in accordance with our Bylaws then in effect and the Statement of Designation.
No dividend may be declared or paid or set apart for payment on any Junior Stock (other than a dividend payable solely in shares of Junior Stock) unless full cumulative dividends have been or contemporaneously are being paid or provided for on all outstanding Series A Preferred Shares for all prior and the then-ending dividend periods. In addition, in the event that full cumulative dividends on the Series A Preferred Shares have not been paid or declared and set apart for payment, we may not repurchase, redeem or otherwise acquire, in whole or in part, any Series A Preferred Shares except pursuant to a purchase or exchange offer made on the same terms to all holders of Series A Preferred Shares. Common shares and any other Junior Stock may not be redeemed, repurchased or otherwise acquired unless full cumulative dividends on the Series A Preferred Shares for all prior and the then-ending dividend periods have been paid or declared and set apart for payment.
Accumulated dividends in arrears for any past dividend period may be declared by our Board and paid on any date fixed by our Board, whether or not a Dividend Payment Date, to holders of the Series A Preferred Shares on the record date for such payment, which may not be more than 60 days, nor less than 5 days, before such payment date. Subject to the next succeeding sentence, if all accumulated dividends in arrears on all outstanding Series A Preferred Shares have not been declared and paid, or sufficient funds for the payment thereof have not been set apart, payment of accumulated dividends in arrears will be made in order of their respective Dividend Payment Dates. If less than all dividends payable with respect to all Series A Preferred Shares are paid, any partial payment will be made pro rata with respect to the Series A Preferred Shares entitled to a dividend payment at such time in proportion to the aggregate amounts remaining due in respect of such shares at such time. Holders of the Series A Preferred Shares will not be entitled to any dividend, whether payable in cash, property or stock, in excess of full cumulative dividends. No interest or sum of money in lieu of interest will be payable in respect of any dividend payment which may be in arrears on the Series A Preferred Shares.
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Liquidation Rights
The holders of outstanding Series A Preferred Shares will be entitled, in the event of any liquidation, dissolution or winding upsettlement”) of our affairs, whether voluntary or involuntary, to receive the liquidation preference of $30.00 per share in cash plus an amount equal to accumulated and unpaid dividends thereon to the date fixed for payment of such amount (whether or not declared), and no more, before any distribution will be made to the holders of our common shares or any other Junior Stock. A consolidation or merger of us with or into any other entity, individually or in a series of transactions, will not be deemed a liquidation, dissolution or winding up of our affairs for this purpose. In the event that our assets available for distribution to holders of the outstanding Series A Preferred Shares are insufficient to permit payment of all required amounts, our assets then remaining will be distributed among the Series A Preferred Shares, as applicable, ratably on the basis of their relative aggregate liquidation preferences. After payment of all required amounts to the holders of the outstanding Series A Preferred Shares, our remaining assets and funds will be distributed among the holders of the common shares and any other Junior Stock then outstanding according to their respective rights.
Voting Rights
The Series A Preferred Shares have no voting rights except as provided by Marshall Islands law. Unless the Company shall have received the affirmative vote or consents of the holders of at least two thirds of the outstanding Series A Preferred Shares, voting as a single class, the Company may not adopt any amendment to its Articles of Incorporation that adversely alters the preferences, powers or rights of the Series A Preferred Shares.
Redemption
Optional Redemption
We have the right, at any time, to redeem the Series A Preferred Shares, in whole or from time to time in part, from any funds available for such purpose. Any such redemption shall occur on a date set by the Company, or the Redemption Date.
Redemption Procedures
(a) Redemption Price. The Company may redeem each share of Series A Preferred Shares with cash, common shares or a Note as shall be determined by the Company at its sole discretion. If the Company redeems Series A Preferred Shares with cash, then each share of Series A Preferred Shares shall have a value of $30.00 per share, whether or not declared, or the Cash Redemption Price. If paid in common shares or a Note, then each Series A Preferred Share shall have a value of $25.00 per share, whether or not declared, or the Cashless Redemption Price and together with the cash Redemption Price, the Redemption Price. If paid in common shares, the price of the common shares will be 90% of the lowest daily volume weighted average price on any trading day during the 5-consecutive trading day period ending and including the trading day immediately prior to the date of the applicable Redemption Date.
Notwithstanding any other provisions herein, the holder of Series A Preferred Shares shall not acquire, or be obligated or have the right to acquire, any common share pursuant to an optional redemption which, when aggregated with all other common shares then beneficially owned (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder) by the Holder and its Affiliates, would result in the beneficial ownership by the holder of Series A Preferred Shares of more than 4.9% of the then issued and outstanding common shares, or the Ownership Limitation. If the Company issues a Redemption Notice that would cause the aggregate number of common shares then beneficially owned (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder) by the holder of Series A Preferred Shares and its affiliates to exceed the Ownership Limitation, such Redemption Notice shall be void ab initio to the extent of the amount by which the number of common shares otherwise issuable pursuant to such Redemption Notice, together with all common shares then beneficially owned (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder) by the holder of Series A Preferred Shares and its affiliates, would exceed the Ownership Limitation. Upon the written or oral request of the holder of Series A Preferred Shares, the Company shall promptly confirm orally or in writing to the holder of Series A Preferred Shares the number of common shares then outstanding.
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The holder of Series A Preferred Shares and the Company shall each cooperate in good faith in the determinations required hereby and the application hereof. The written certification to the Company by the holder of Series A Preferred Shares of the applicability of the Ownership Limitation, and the resulting effect thereof hereunder at any time, shall be conclusive with respect to the applicability thereof and such result absent manifest error. Upon delivery of a written notice to the Company, the holder of Series A Preferred Shares may from time to time increase (with such increase not effective until the sixty-first (61st) day after delivery of such notice) or decrease the Ownership Limitation to any other amount of common shares not in excess of 9.99% of the then issued and outstanding shares of common shares as specified in such notice, provided that any such increase in the Ownership Limitation will not be effective until the sixty-first (61st) day after such written notice is delivered to the Company.
(b) Redemption Notice. The Company shall give notice of any redemption by mail not less than 30 days and not more than 60 days before the scheduled Redemption Date, to the holder of Series A Preferred Shares of record (as of 4:59 p.m. New York City time on the Business Day next preceding the day on which notice is given) of any Series A Preferred Shares to be redeemed as such holders' names appear on the Company's stock transfer books maintained by the Registrar and Transfer Agent and at the address of such holders shown therein. Such notice, or the Redemption Notice shall state: (1) the Redemption Date, (2) the number of Series A Preferred Shares to be redeemed and, if less than all outstanding Series A Preferred Shares are to be redeemed, the number (and the identification) of shares to be redeemed from such Holder, (3) the Redemption Price, (4) the place where the Series A Preferred Shares is to be redeemed and shall be presented and surrendered for payment of the Redemption Price therefor and (5) that dividends on the stock to be redeemed shall cease to accumulate from and after such Redemption Date.
(c) Effect of Redemption; Partial Redemption. If the Company elects to redeem less than all of the outstanding Series A Preferred Shares, the number of shares to be redeemed shall be determined by the Company, and such shares shall be redeemed pro rata or by lot, with adjustments to avoid redemption of fractional shares. The Company shall give notice, or cause notice to be given, to the holders of the number of shares of Series A Preferred Shares to be redeemed, and the Company shall determine the number of Series A Preferred Shares to be redeemed from the account of each of its participants holding such shares in its participant account. The aggregate Redemption Price for any such partial redemption of the outstanding Series A Preferred Shares shall be allocated correspondingly among the redeemed Series A Preferred Shares. The Series A Preferred Shares not redeemed shall remain outstanding and subject to all the terms providedconsolidated financial statements included elsewhere in this Statement of Designation.annual report.
(d) Redemption Funds. If the Company gives or causes to be given a Redemption Notice, the Company shall deposit with the paying agent funds sufficient to redeem the Series A Preferred Shares as to which such Redemption Notice shall have been given, no later than 4:59 p.m. New York City time on the Business Day immediately preceding the Redemption Date, and shall give the paying agent irrevocable instructions and authority to pay the Redemption Price to the holders of the Series A Preferred Shares to be redeemed upon surrender or deemed surrender of the certificates therefor. If the Redemption Notice shall have been given, from and after the Redemption Date, unless the Company defaults in providing funds sufficient for such redemption at the time and place specified for payment pursuant to the Redemption Notice, all dividends on such Series A Preferred Shares to be redeemed shall cease to accumulate and all rights of Holders of such shares as the Company's shareholders shall cease, except the right to receive the Redemption Price, and such shares shall not thereafter be transferred on Company's stock transfer books or be deemed to be outstanding for any purpose whatsoever. The Company shall be entitled to receive from the paying agent the interest income, if any, earned on such funds deposited with the paying agent (to the extent that such interest income is not required to pay the Redemption Price of the Series A Preferred Shares to be redeemed), and the holders of any shares so redeemed shall have no claim to any such interest income. Any funds deposited with the paying agent hereunder by the Company for any reason, including, but not limited to, redemption of Series A Preferred Shares, that remain unclaimed or unpaid after two years after the applicable Redemption Date or other payment date, shall be, to the extent permitted by law, repaid to the Company upon its written request after which repayment the holders of the Series A Preferred Shares entitled to such redemption or other payment shall have recourse only to the Company. Notwithstanding any Redemption Notice, there shall be no redemption of any Series A Preferred Shares called for redemption until funds sufficient to pay the full Redemption Price of such shares shall have been deposited by the Company with the paying agent.
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(e) Certificate. If only a portion of the Series A Preferred Shares represented by a certificate shall have been called for redemption, upon surrender of the certificate to the Paying Agent, the Paying Agent shall issue to the Holder of such shares a new certificate (or adjust the applicable book-entry account) representing the number of shares of Series A Preferred Shares represented by the surrendered certificate that have not been called for redemption.
Description of Series B Preferred Shares
On September 22, 2017, pursuant to an Exchange Agreement dated September 22, 2017, between the Company, Spetses Shipping Co., and the shareholders of Spetses Shipping Co., we issuedmade certain issuances of our capital stock, including the issuance of 12,000 shares of Series B Preferred Shares to Thalassa, undera company controlled by Petros Panagiotidis, the Exchange Agreement.Company’s Chairman, Chief Executive Officer and Chief Financial Officer. Each Series B Preferred Share has the voting power of one hundred thousand (100,000) common shares.
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The Series B Preferred Shares have the following characteristics:
Conversion

•
Conversion. The Series B Preferred Shares are not convertible into common shares.

•
Voting. Each Series B Preferred Share has the voting power of 100,000 common shares and count for 100,000 votes for purposes of determining quorum at a meeting of shareholders. The Series B Preferred Share vote together with common shares as a class, except that the Series B Preferred Shares vote separately as a class on amendments to the Articles of Incorporation that would materially alter or change the powers, preference or special rights of the Series B Preferred Shares.

•
Distributions. The Series B Preferred Shares have no dividend or distribution rights.

•
Liquidation, Dissolution or Winding Up. Upon any liquidation, dissolution or winding up of the Company, the Series B Preferred Shares shall have the same liquidation rights as the common shares.
Voting. Each Series B Preferred Share has the voting power of 100,000 common shares and count for 100,000 votes for purposes of determining quorum at a meeting of shareholders.
Distributions. The Series B Preferred Shares have no dividend or distribution rights.
Liquidation, Dissolution or Winding Up. Upon any liquidation, dissolution or winding up of the Company, the Series B Preferred Shares shall have the same liquidation rights as the common shares.
Stockholders Rights Agreement
On November 21, 2017, our Board declared a dividend of one preferred share purchase right (a “Right” or a Right,the “Rights”), for each outstanding common share and adopted a shareholder rights plan, as set forth in the Stockholders Rights Agreement dated as of November 20, 2017 or the Rights Agreement,(the “Rights Agreement”), by and between the Company and American Stock Transfer & Trust Company, LLC, as rights agent.
The Board adopted the Rights Agreement to protect shareholders from coercive or otherwise unfair takeover tactics. In general terms, it works by imposing a significant penalty upon any person or group that acquires 15% or more of our outstanding common shares without the approval of our Board. If a shareholder's beneficial ownership of our common shares as of the time of the public announcement of the rights plan and associated dividend declaration is at or above the applicable threshold, that shareholder's then-existing ownership percentage would be grandfathered, but the rights would become exercisable if at any time after such announcement, the shareholder increases its ownership percentage by 1% or more. Our Chairman, Chief Executive Officer and Chief Financial Officer, Petros Panagiotidis, is exempt from these provisions.
The Rights may have anti-takeover effects. The Rights will cause substantial dilution to any person or group that attempts to acquire us withoutentitle the approval of our Board. As a result, the overall effect of the Rights may be to render more difficult or discourage any attempt to acquire us. Because our Board can approve a redemption of the Rights for a permitted offer, the Rights should not interfere with a merger or other business combination approved by our Board.
For those interested in the specific terms of the Rights Agreement, we provide the following summary description. Please note, however, that this description is only a summary, and is not complete, and should be read together with the entire Rights Agreement, which is an exhibit to this annual report. The foregoing description of the Rights Agreement is qualified in its entirety by reference to such exhibit.
The Rights. The Rights trade with, and are inseparable from, our common shares. The Rights are evidenced only by certificates that represent our common shares. New Rights will accompany any new common shares of the Company issued after November 21, 2017 until the Distribution Date described below.
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Exercise Price. Each Right allows its holder to purchase from the Company one one-thousandth of a share of Series C Participating Preferred Shares or a Series C Preferred Share, for $15.00, or(as defined in the Exercise Price, once theStockholders Rights Agreement) and become exercisable. This portion of a Series C Preferred Share will give the shareholder approximately the same dividend, voting and liquidation rights as would one common share. Prior to exercise, the Right does not give its holder any dividend, voting, or liquidation rights.
Exercisability. The Rights are not exercisable until 10 days after thea public announcement that a person or group has become an "Acquiring Person" by obtainingobtained beneficial ownership of 15% or more of our outstanding common shares. Except our Chairman, Chief Executive Officer and Chief Financial Officer, Petros Panagiotidis, is exempt from being the "Acquiring Person".
Certain synthetic interests in securities created by derivative positions — whether or not such interests are considered to be ownershipSee Exhibit 2.2 (Description of Securities) for a full description of the underlying common shares or are reportable for purposesStockholders Rights Agreement. As of Regulation 13D of the Securities Exchange Act of 1934, as amended— are treated as beneficial ownership of the number ofDecember 31, 2021, 94,610,088 Rights were issued and outstanding in connection with our common shares equivalent to the economic exposure created by the derivative position, to the extent our actual common shares are directly or indirectly held by counterparties to the derivatives contracts. Swaps dealers unassociated with any control intent or intent to evade the purposes of the Rights Agreement are excepted from such imputed beneficial ownership.shares.
For persons who, prior to the time of public announcement of the Rights Agreement, beneficially own 15% or more of our outstanding common shares, the Rights Agreement "grandfathers" their current level of ownership, so long as they do not purchase additional shares in excess of certain limitations.
The date when the Rights become exercisable is the "Distribution Date". Until that date, our common share certificates (or, in the case of uncertificated shares, by notations in the book-entry account system) will also evidence the Rights, and any transfer of our common shares will constitute a transfer of Rights. After that date, the Rights will separate from our common shares and will be evidenced by book-entry credits or by Rights certificates that the Company will mail to all eligible holders of our common shares. Any Rights held by an Acquiring Person are null and void and may not be exercised.
Series C Preferred Share Provisions
Each one one-thousandth of a Series C Preferred Share, if issued, will, among other things:
not be redeemable;
entitle holders to quarterly dividend payments in an amount per share equal to the aggregate per share amount of all cash dividends, and the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in our common shares or a subdivision of our outstanding common shares (by reclassification or otherwise), declared on our common shares since the immediately preceding quarterly dividend payment date; and
entitle holders to one vote on all matters submitted to a vote of the shareholders of the Company.
The value of one one-thousandth interest in a Series C Preferred Share should approximate the value of one common share.
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Consequences of a Person or Group Becoming an Acquiring Person.
Flip In.  If an Acquiring Person obtains beneficial ownership of 15% or more of our common shares, then each Right will entitle the holder thereof to purchase, for the Exercise Price, a number of our common shares (or, in certain circumstances, cash, property or other securities of the Company) having a then-current market value of twice the Exercise Price. However, the Rights are not exercisable following the occurrence of the foregoing event until such time as the Rights are no longer redeemable by the Company, as further described below.
Following the occurrence of an event set forth in preceding paragraph, all Rights that are or, under certain circumstances specified in the Rights Agreement, were beneficially owned by an Acquiring Person or certain of its transferees will be null and void.
Flip Over. If, after an Acquiring Person obtains 15% or more of our common shares, (i) the Company merges into another entity; (ii) an acquiring entity merges into the Company; or (iii) the Company sells or transfers 50% or more of its assets, cash flow or earning power, then each Right (except for Rights that have previously been voided as set forth above) will entitle the holder thereof to purchase, for the Exercise Price, a number of our common shares of the person engaging in the transaction having a then-current market value of twice the Exercise Price.
Notional Shares. Shares held by affiliates and associates of an Acquiring Person, including certain entities in which the Acquiring Person beneficially owns a majority of the equity securities, and Notional Common Shares (as defined in the Rights Agreement) held by counterparties to a Derivatives Contract (as defined in the Rights Agreement) with an Acquiring Person, will be deemed to be beneficially owned by the Acquiring Person.
Redemption. The Board may redeem the Rights for $0.01 per Right at any time before any person or group becomes an Acquiring Person. If the Board redeems any Rights, it must redeem all of the Rights. Once the Rights are redeemed, the only right of the holders of the Rights will be to receive the redemption price of $0.01 per Right. The redemption price will be adjusted if the Company has a stock dividend or a stock split.
Exchange. After a person or group becomes an Acquiring Person, but before an Acquiring Person owns 50% or more of our outstanding common shares, the Board may extinguish the Rights by exchanging one common share or an equivalent security for each Right, other than Rights held by the Acquiring Person. In certain circumstances, the Company may elect to exchange the Rights for cash or other securities of the Company having a value approximately equal to one common share.
Expiration. The Rights expire on the earliest of (i) November 21, 2027, or (ii) the redemption or exchange of the Rights as described above.
Anti-Dilution Provisions. The Board may adjust the purchase price of the Series C Preferred Shares, the number of Series C Preferred Shares issuable and the number of outstanding Rights to prevent dilution that may occur from a stock dividend, a stock split, or a reclassification of the Series C Preferred Shares or our common shares. No adjustments to the Exercise Price of less than 1% will be made.
Amendments. The terms of the Rights and the Rights Agreement may be amended in any respect without the consent of the holders of the Rights on or prior to the Distribution Date. Thereafter, the terms of the Rights and the Rights Agreement may be amended without the consent of the holders of Rights, with certain exceptions, in order to (i) cure any ambiguities; (ii) correct or supplement any provision contained in the Rights Agreement that may be defective or inconsistent with any other provision therein; (iii) shorten or lengthen any time period pursuant to the Rights Agreement; or (iv) make changes that do not adversely affect the interests of holders of the Rights (other than an Acquiring Person or an affiliate or associate of an Acquiring Person).
Taxes. The distribution of Rights should not be taxable for federal income tax purposes. However, following an event that renders the Rights exercisable or upon redemption of the Rights, shareholders may recognize taxable income.
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Description of the Class A Warrants
The following summary of certain terms and provisions of our Class A Warrants is not complete and is subject to and qualified in its entirety by the provisions of the form of Class A Warrant, which is filed as an exhibit to our registration statement on Form F-1/A (Registration No. 333-238990), filed with the Commission on June 23, 2020. Prospective investors should carefully review the terms and provisions set forth in the form of Class A Warrant.
Exercise Price. The exercise price per whole common share purchasable upon exercise of the Class A Warrants is $3.50 per share. The exercise price and number of common shares issuable upon exercise will adjust in the event of certain stock dividends and distributions, stock splits (including the reverse stock split we effected on May 28, 2021), stock combinations, reclassifications or similar events affecting our common shares. The Class A Warrants may be exercised at any time until they are exercised in full. 5,848,656 of the Class A Warrants were exercised in full prior to the date of this annual report, resulting in the issuance of an aggregate of 5,848,656 common shares for an aggregate exercise price of approximately $20.5 million. As of the date of this annual report, 62,344 Class A Warrants remain outstanding.
Exercisability. The Class A Warrants are exercisable at any time after their original issuance up to the date that is five years after their original issuance. Each of the Class A Warrants will beis exercisable, at the option of each holder, in whole or in part by delivering to us a duly executed exercise notice and, at any time a registration statement registering the issuance of the common shares underlying the Class A Warrants under the Securities Act is effective and available for the issuance of such shares, or an exemption from registration under the Securities Act is available for the issuance of such shares, by payment in full in immediately available funds for the number of common shares purchased upon such exercise.
If a registration statement registering the issuance of the common shares underlying the Class A Warrants under the Securities Act is not effective or available and an exemption from registration under the Securities Act is not available for the issuance of such shares, the holder may, in its sole discretion, elect to exercise the Class A Warrant through a cashless exercise, in which case the holder would receive upon such exercise the net number of common shares determined according to the formula set forth in the Class A Warrant. No fractional common shares will be issued in connection with the exercise of a Class A Warrant. In lieu of fractional shares, we will pay the holder an amount in cash equal to the fractional amount multiplied by the exercise price.
Exercise Price. The exercise price per whole common share purchasable upon exercise of the Class A Warrants is $0.35 per share. The exercise price and number of common shares issuable upon exercise will adjust in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting our common shares. The Class A Warrants will be immediately exercisable and may be exercised at any time until they are exercised in full.
Transferability. Subject to applicable laws, the Class A Warrants may be offered for sale, sold, transferred or assigned without our consent.
Exchange Listing. We do not intend to apply for the listing of the Class A Warrants on any stock exchange. Without an active trading market, the liquidity of the Class A Warrants will be limited.
Rights as a Shareholder. Except as otherwise provided in the Class A Warrants or by virtue of such holder's ownership of our common shares, the holder of a Class A Warrant does not have the rights or privileges of a holder of our common shares, including any voting rights, until the holder exercises the Class A Warrant.
Fundamental Transactions. In the event of a fundamental transaction, as described in the Class A Warrants and generally including, with certain exceptions, any reorganization, recapitalization or reclassification of our common shares, the sale, transfer or other disposition of all or substantially all of our properties or assets, our consolidation or merger with or into another person, the acquisition of more than 50% of our outstanding common shares, or any person or group becoming the beneficial owner of 50% of the voting power represented by our outstanding common shares, the holders of the Class A Warrants will be entitled to receive upon exercise of the warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised the Class A Warrants immediately prior to such fundamental transaction.
Governing Law. The Class A Warrants and warrant agreement are governed by New York law.
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Description of the Private Placement Warrants
Each Private Placement Warrant is exercisable at any time after its original issuance for $0.35 per common share and has a term of 5 years. If a registration statement registering the resale of the common shares underlying the Private Placement Warrants under the Securities Act is not effective or available at any time after the six month anniversary of the date of issuance of the Private Placement Warrants, the holder may, in its sole discretion, elect to exercise the Private Placement Warrant through a cashless exercise, in which case the holder would receive upon such exercise the net number of common shares determined according to the formula set forth in the Private Placement Warrant. The Private Placement Warrant containscontain certain damages provisions pursuant to which we have agreed to pay the holder certain damages if we do not issue the shares in a timely fashion.
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A holder will not have the right to exercise any portion of the Private Placement WarrantClass A Warrants if the holder (together with its affiliates) would beneficially own in excess of 4.99% (or, upon election of the holder, 9.99%) of the number of our common shares outstanding immediately after giving effect to the exercise, as such percentage of beneficial ownership is determined in accordance with the terms of the Private PlacementClass A Warrants. However, any holder may increase or decrease such percentage, but not in excess of 9.99%, provided that any increase will not be effective until the 61st day after such election. The exercise price
Transferability. Subject to applicable laws, the Class A Warrants may be offered for sale, sold, transferred or assigned without our consent.
Exchange Listing. We do not intend to apply for the listing of the Private PlacementClass A Warrants is subject to appropriate adjustmenton any stock exchange. Without an active trading market, the liquidity of the Class A Warrants will be limited.
Rights as a Shareholder. Except as otherwise provided in the eventClass A Warrants, the holder of certain stock dividends and distributions, stock splits, stock combinations, reclassificationsa Class A Warrant does not have the rights or similar events affectingprivileges of a holder of our common shares, and also uponincluding any distributionsvoting rights, until the holder exercises the Class A Warrant.
Pro Rata Distributions. If, while the Class A Warrants are outstanding, we make certain dividend or distribution of our assets to holders of Common Stock, including any distribution of cash, stock, property or other propertyoptions by way of dividend, or spin off, all holders of the Class A Warrants are entitled to our shareholders.participate in the distribution to the same extent as if the holder had held the number of common shares acquirable upon exercise of the warrant on the date of the distribution.
Fundamental Transactions. If a fundamental transaction occurs, then the successor entity will succeed to, and be substituted for us, and may exercise every right and power that we may exercise and will assume all of our obligations under the Private PlacementClass A Warrants with the same effect as if such successor entity had been named in the Private PlacementClass A Warrant itself. If holders of our common shares are given a choice as to the securities, cash or property to be received in a fundamental transaction, then the holder shall be given the same choice as to the consideration it receives upon any exercise of the Private Placement WarrantClass A Warrants following such fundamental transaction. In addition, we or the successor entity, at the request of Private PlacementClass A Warrant holders, will be obligated to purchase any unexercised portion of the Private PlacementClass A Warrants in accordance with the terms of such Private PlacementClass A Warrants. We have also agreed to file a registration statement to register the resale
Governing Law. The Class A Warrants and warrant agreement are governed by New York law.
Description of the common shares underlying the Private Placement Warrants within 30 calendar days from
Each Private Placement Warrant is exercisable at any time after its issuance for $3.50 per common share and has a term of 5 years. The Private Placement Warrants have substantially the same terms as the Class A Warrants described above, except that they are subject to certain restrictions on transfer and contain different adjustment provisions for pro rata distributions. In the event of a pro rata distribution, the number of common shares issuable upon the exercise of each Private Placement Warrant will adjust proportionally against the new number of outstanding common shares such that the exercise price of the warrant remains unchanged, unless our Board decides to exercise its discretion to instead decrease the exercise price of the Private Placement Warrants by the amount distributed to each common share. The value of the exercise price adjustment will be determined by the Board in good faith. 5,707,136 of the Private Placement Warrants were exercised in full prior to the date of this annual report, resulting in the Securities Purchase Agreement. We have also agreed to use commercially reasonable efforts to cause such registration to become effective and to keep such registration statement effective at all times until no investor owns anyissuance of an aggregate of 5,707,136 common shares for an aggregate exercise price of approximately $20.0 million. As of the date of this annual report, 67,864 Private Placement Warrants or shares issuable upon exercise thereof.remain outstanding.
Description of the January 5 and January 12 Warrants
Each January 5 Warrant and January 12 Warrant was exercisable for $0.19$1.90 per common share and for aover an initial term of 5 years.years, on substantially the same terms as the Class A Warrants described above. All of the January 5 and January 12 Warrants were exercised in full prior to the date of this annual report, resulting in the issuance of an aggregate of 231,750,00023,175,000 common shares for an aggregate exercise price of approximately $44.0 million.
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Description of the April 7 Warrants
Each April 7 Warrant is exercisable for $6.50 per common share and for a term of 5 years, on substantially the same terms as the Private Placement Warrants described above. As of the date of this annual report, all 19,230,770 April 7 Warrants remain outstanding.
For further details on the foregoing warrants, see Note 8 to our consolidated financial statements included elsewhere in this annual report.
Listing and Markets
On December 21, 2018, our common shares, par value $0.001, were registered for trading on the NOTC with ticker symbol "CASTOR"“CASTOR”. On February 11, 2019, our common shares began trading on the NASDAQ Capital Market under the ticker symbol "CTRM"“CTRM”. On March 21, 2019, Nasdaq approved for listing and registration on Nasdaq the Preferred Stock Purchase Rights under the Stockholders Rights Agreement. The Preferred Stock Purchase Rights trade with and are inseparable from our common shares.
Transfer Agent
The registrar and transfer agent for our common shares is American Stock Transfer & Trust Company, LLC.
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C.Material Contracts
We refer you to "Item“Item 4. Information on the Company", "ItemCompany,” “Item 5. Operating and Financial Review and Prospects - B.—B. Liquidity and Capital Resources"Resources” and "Item 7“Item 7. Major Shareholders and Related Party Transactions – Transactions—B. Related Party Transactions"Transactions” for a discussion of thecertain material contracts to which we are a party that we consider to be both material and not entered into in the ordinary course of business during the two-year period immediately preceding the date of this annual report. Certain of these material agreements thatreport, which are to be performed in whole or in part at or after the date of this annual report arealso attached as exhibits to this annual report. Other than these contracts, we have no other material contracts, other than contracts entered into in the ordinary course of business, to which we are a party during the two-year period immediately preceding the date of this annual report.
D.Exchange Controls
The Marshall Islands impose no exchange controls on non-resident corporations.
E.Taxation
The following is a discussion of the material Marshall Islands and U.S. federal income tax considerations relevant to a U.S. Holder and a Non-U.S. Holder, each as defined below, with respect to the common stock.shares. This discussion does not purport to deal with the tax consequences of owning common stockshares to all categories of investors, such as dealers in securities or commodities, traders in securities that elect to use a mark-to-market method of accounting for securities holdings, financial institutions, insurance companies, tax-exempt organizations, U.S. expatriates, persons liable for the Medicare contribution tax on net investment income, persons liable for the alternative minimum tax, persons who hold common shares as part of a straddle, hedge, conversion transaction or integrated investment, U.S. Holders whose functional currency is not the United States dollar, persons required to recognized income no later than when such income is included on an "applicable financial statement," persons subject to the "base erosion and anti-avoidance" tax, and investors that own, actually or under applicable constructive ownership rules, 10% or more of our common shares, may be subject to special rules.shares. This discussion deals only with holders who hold our common shares as a capital asset. You are encouraged to consult your own tax advisors concerning the overall tax consequences arising in your own particular situation under U.S. federal, state, local or foreign law of the ownership of common stock.shares. The discussion below is based, in part, on the description of our business in this annual report above and assumes that we conduct our business as described in that section. Except as otherwise noted, this discussion is based on the assumption that we will not maintain an office or other fixed place of business within the United States. References in the following discussion to "we"“we” and "us"“us” are to Castor Maritime Inc. and its subsidiaries on a consolidated basis.
Marshall Islands Tax Consequences
We are incorporated in the Republic of the Marshall Islands. Under current Marshall Islands law, we are not subject to tax on income or capital gains, and no Marshall Islands withholding tax will be imposed upon payments of dividends by us to our shareholders.
U.S. Federal Income Taxation of Our Company
Taxation of Operating Income: In General

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Unless exempt from U.S. federal income taxation under the rules discussed below, a foreign corporation is subject to U.S. federal income taxation in respect of any income that is derived from the use of vessels, from the hiring or leasing of vessels for use on a time, voyage or bareboat charter basis, from the participation in a pool, partnership, strategic alliance, joint operating agreement, cost sharing arrangements or other joint venture it directly or indirectly owns or participates in that generates such income, or from the performance of services directly related to those uses, which we refer to collectively as "shipping“shipping income,"” to the extent that the shipping income is derived from sources within the United States. For these purposes, 50% of shipping income that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States constitutes income from sources within the United States, which we refer to as "U.S.-source“U.S. source gross shipping income".income” or USSGTI.
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Shipping income attributable to transportation that both begins and ends in the United States is considered to be 100% from sources within the United States.U.S. source income. We are not permitted by law to engage in such transportation and thus will not earn income that produces income which is considered to be 100% from sources within the United States.
Shipping income attributable to transportation exclusively between non-U.S. ports will beis considered to be 100% derived from sources outside the United States. ShippingSuch income derived from sources outside the United States willis not be subject to any U.S. federal income tax.
In the absence of exemption
If not exempt from tax under Section 883 of the Code, our gross U.S.-source shipping incomeUSSGTI would be subject to a 4% tax imposedof 4% without allowance for any deductions (“the 4% tax”) as described below.
Exemption of Operating Income from U.S. Federal Income Taxation
Under Section 883 of the Code and the regulations thereunder, we will be exempt from U.S. federal incomethe 4% tax on our U.S.-source shipping incomeUSSGTI if:
(1) we are organized in a foreign country or our country of organization, that grants an "equivalent exemption"“equivalent exemption” to corporations organized in the United States; and
(2)  either
A.
(a) more than 50% of the value of our stock is owned, directly or indirectly, by individuals who are "residents"“residents” of our country of organization or of anothera foreign country that grants an "equivalent exemption"“equivalent exemption” to corporations organized in the United States (each such individual is a "qualified shareholder"“qualified shareholder” and such individuals collectively, "qualified shareholders"“qualified shareholders”), which we refer to as the "50%“50% Ownership Test,"” or
B.
(b) our stock is "primarily“primarily and regularly traded on an established securities market"market” in our country of organization, in another country that grants an "equivalent exemption"“equivalent exemption” to U.S. corporations, or in the United States, which we refer to as the "Publicly-Traded Test"“Publicly-Traded Test”.
The Marshall Islands, the jurisdiction wherein which we and our ship-owning subsidiaries are incorporated, grants an "equivalent exemption"“equivalent exemption” to U.S. corporations. Therefore, we will be exempt from U.S. federal income tax with respect tothe 4% on our U.S.-source shipping incomeUSSGTI if we meet either the 50% Ownership Test or the Publicly-Traded Test is met.Test.
Due to the wide publicly-heldwidely dispersed nature of the ownership of our common stock, we do not expectshares, it is highly unlikely that we will be able tocould satisfy the requirements of the 50% Ownership Test. Therefore, we willexpect to be exempt from U.S. federal income taxationthe 4% tax on our U.S. source shipping incomeUSSGTI only if we are able to satisfy the Publicly-Traded Test.
Treasury Regulations provide, in pertinent part, that stock of a foreign corporation willmust be considered to be "primarily traded"“primarily and regularly traded on an established securities market ifin the US or in a qualified foreign country”. To be “primarily traded” on an established securities market, the number of shares of each class of our stock that are traded during any taxable year on all established securities markets in thatthe country exceedswhere they are listed must exceed the number of shares in each such class that are traded during that year on established securities markets in any other single country. Our common stock is "primarily traded"shares, which are traded on the Nasdaq Capital Market.Market, meet the test of being “primarily traded”.
Under the Treasury Regulations, our common stock will
To be considered to be "regularly traded" on an established securities market if“regularly traded” one or more classes of our stock representing more than 50% of our outstanding shares, bythe total combined voting power of all classes of stock entitled to vote and of the total value of the stock that is listed must be listed on an established securities market (“the market which we refer to as the listing threshold. Although ourvote and value” test) and meet certain other requirements. Our common stock isshares are listed on the Nasdaq Capital Market, our common stock maybut do not represent more than 50% of the voting power of all classes of stock entitiesentitled to vote. Our Series B Preferred Shares, which have super voting rights and have voting control but are not entitled to dividends, are not listed. Thus, based on a strict reading of the vote and value test described above, our stock is not “regularly traded”.
Because
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Treasury Regulations provide, in pertinent part, that a class of stock will not be considered to be “regularly traded” on an established securities market for any taxable year in which 50% or more of such class of the outstanding shares of the stock is owned, actually or constructively under specified stock attribution rules, on more than half the days during the taxable year by persons who each own 5% or more of the value of such class of the outstanding stock, which we refer to as the “5 Percent Override Rule”. When more than 50% of the shares are owned by 5% shareholders, then we will be subject to the 5% Override Rule unless we can establish that among the shares included in the closely-held block of stock are a sufficient number of shares in that block to “prevent nonqualified shareholders in the closely held block from owning 50 percent or more of the stock”.
We believe our ownership structure meets the intent and purpose of the Publicly-Traded Test and the tax policy behind it even if it does not literally meet the vote and value requirements. In our case, there is no closely held block because less than 5% shareholders in aggregate own more than 50% of the value of our stock. However, we expect that we would have satisfied the Publicly-Traded Test if, instead of our current share structure, our common stock may not haveshares represented more than 50% of the voting power of all classesour stock. In addition, we can establish that nonqualified shareholders cannot exercise voting control over the corporation because a qualified shareholder controls the non-traded voting stock. Moreover, we believe that the 5% Override Rule suggests that the Publicly-Traded Test should be interpreted by reference to its overall purpose, which we consider to be that Section 883 should generally be available to a publicly traded company unless it is more than 50% owned, by vote or value, by nonqualified 5% shareholders. We therefore believe our particular stock structure, when considered by the US Treasury in light of the Publicly-Traded Test enunciated in the regulations should be accepted as satisfying the exemption. Accordingly, for our stock entitled to vote, notwithstanding that it was traded on the Nasdaq Capital Market in 2020,2021 and future taxable years, we intend to take the position on our 2020 U.S. federal income tax returns that we did not satisfyqualify for the benefits of Section 883. However, there can be no assurance that our particular stock structure will be treated as satisfying the Publicly-Traded Test. However,Accordingly, there can be no assurance that we mayor our subsidiaries will qualify for the exemption underbenefits of Section 883 in futurefor any taxable years, although no assurance can be given in this regard.year.
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Taxation in the Absence of Exemption under Section 883 of the Code
Because
For the benefits of Section 883 of the Code may be unavailable,2020 and prior taxable years, we intend to taketook the position that our U.S.-source shipping income,USSGTI, to the extent not considered to be "effectively connected"“effectively connected” with the conduct of a U.S. trade or business, as described below, iswas subject to a 4% tax imposed by Section 887 of the Code on a gross basis, without the benefit of deductions, which we refer to as the "4%“4% gross basis tax regime,"” for the 2020 taxable year. Since under the sourcingThe same rules would apply to us for our 2021 and future taxable years if contrary to our position described above no more than 50%the IRS determines that we do not qualify for the benefits of our shipping income would be treated as being derived from U.S. sources,Section 883 of the maximum effective rate of U.S. federal income tax on our shipping income should never exceed 2% under the 4% gross basis tax regime.Code.
To the extent the benefits of the exemption under Section 883 of the Code are unavailable and our U.S.-source shipping incomeUSSGTI is considered to be "effectively connected"“effectively connected” with the conduct of a U.S. trade or business, as described below, any such "effectively connected"“effectively connected” U.S.-source shipping income, net of applicable deductions, would be subject to the U.S. federal corporate income tax imposed at a rate of 21%. In addition, we may be subject to the 30% "branch profits"“branch profits” tax on earnings effectively connected with the conduct of such U.S. trade or business, as determined after allowance for certain adjustments, and on certain interest paid or deemed paid attributable to the conduct of such U.S. trade or business.
Our U.S.-source shipping income
USSGTI would be considered "effectively connected"“effectively connected” with the conduct of a U.S. trade or business only if:
We have, or are considered to have, a fixed place of business in the United States involved in the earning of shipping income; and
substantially all of our U.S.-source shipping incomeUSSGTI is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the United States.
We do not currently have, nor intend to have or permit circumstances that would result in having, any vessel operating to the United States on a regularly scheduled basis. Based on the foregoing and on the expected mode of our shipping operations and other activities, we believe that none of our U.S.-source shipping incomeUSSGTI will be "effectively connected"“effectively connected” with the conduct of a U.S. trade or business.
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U.S. Taxation of Gain on Sale of Vessels
Regardless of whether we qualify for exemption under Section 883 of the Code, we willdo not expect to be subject to U.S. federal income taxation with respect to gain realized on a sale of a vessel, provided the sale is considered to occur outside of the United States under U.S. federal income tax principles. In general, a sale of a vessel will be considered to occur outside of the United States for this purpose if title to the vessel, and risk of loss with respect to the vessel, pass to the buyer outside of the United States. It is expected that any sale of a vessel by us will be considered to occur outside of the United States.
U.S. Federal Income Taxation of U.S. Holders
As used herein, the term "U.S. Holder"“U.S. Holder” means a beneficial owner of our common stockshares that is a U.S. citizen or resident, U.S. corporation or other U.S. entity taxable as a corporation, an estate the income of which is subject to U.S. federal income taxation regardless of its source, or a trust if (i) a court within the United States is able to exercise primary jurisdiction over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (ii) it has in place an election to be treated as a United States person for U.S. federal income tax purposes.
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If a partnership holds our common stock,shares, the tax treatment of a partner of such partnership will generally depend upon the status of the partner and upon the activities of the partnership. If you are a partner in a partnership holding our common stock,shares, you are encouraged to consult your tax advisor.
Distributions
Subject to the discussion of passive foreign investment companies, or PFIC, below, any distributions made by us with respect to our common stockshares to a U.S. Holder will generally constitute dividends to the extent of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of such earnings and profits will be treated first as a nontaxable return of capital to the extent of the U.S. Holder'sHolder’s tax basis in his common stockshares on a dollar-for-dollar basis and thereafter as capital gain. However, we do not expect to calculate earnings and profits in accordance with U.S. federal income tax principles. Accordingly, you should expect to generally treat distributions we make as dividends. Because we are not a U.S. corporation, U.S. Holders that are corporations will generally not be entitled to claim a dividends-received deduction with respect to any distributions they receive from us. Dividends paid with respect to our common stockshares will generally be treated as "passive“passive category income"income” for purposes of computing allowable foreign tax credits for U.S. foreign tax credit purposes.
Dividends paid on our common stockshares to a U.S. Holder who is an individual, trust or estate will generally be treated as ordinary income. However, if you are a U.S. Holder that is an individual, estate or trust, dividends that constitute qualified dividend income will be taxable to you at the preferential rates applicable to long-term capital gains provided that you hold the shares for more than 60 days during the 121-day period beginning 60 days before the ex-dividend date and meet other holding period requirements. Dividends paid with respect to the shares generally will be qualified dividend income provided that, in the year that you receive the dividend, the shares are readily tradable on an established securities market in the United States. Our common stock is listed on the Nasdaq Capital Market and we therefore expect that dividends will be qualified dividend income.
Special rules may apply to any "extraordinary“extraordinary dividend,"” generally, a dividend paid by us in an amount which is equal to or in excess of 10% of a shareholder'sshareholder’s adjusted tax basis (or fair market value in certain circumstances) or dividends received within a one-year period that, in the aggregate, equal or exceed 20% of a shareholder'sshareholder’s adjusted tax basis (or fair market value upon the shareholder'sshareholder’s election) in a common share. If we pay an "extraordinary dividend"“extraordinary dividend” on our common stockshares that is treated as "qualified“qualified dividend income,"” then any loss derived by a U.S. Non-Corporate Holder from the sale or exchange of such common stockshares will be treated as long-term capital loss to the extent of such dividend.
Sale, Exchange or other Disposition of Common StockShares
Subject to the discussion of our status as a PFIC below, a U.S. Holder generally will recognize taxable gain or loss upon a sale, exchange or other disposition of our common stockshares in an amount equal to the difference between the amount realized by the U.S. Holder from such sale, exchange or other disposition and the U.S. Holder'sHolder’s tax basis in such stock. Such gain or loss will be treated as long-term capital gain or loss if the U.S. Holder'sHolder’s holding period is greater than one year at the time of the sale, exchange or other disposition. Such capital gain or loss will generally be treated as U.S.-source income or loss, as applicable, for U.S. foreign tax credit purposes. A U.S. Holder'sHolder’s ability to deduct capital losses is subject to certain limitations.
3.8% Tax on Net Investment Income
A U.S. Holder that is an individual, estate, or, in certain cases, a trust, will generally be subject to a 3.8% tax on the lesser of (1) the U.S. Holder's net investment income for the taxable year and (2) the excess of the U.S. Holder's modified adjusted gross income for the taxable year over a certain threshold (which in the case of individuals is between $125,000 and $250,000). A U.S. Holder's net investment income will generally include distributions made by us which constitute a dividend for U.S. federal income tax purposes and gain realized from the sale, exchange or other disposition of our common stock. This tax is in addition to any income taxes due on such investment income.
If you are a U.S. Holder that is an individual, estate or trust, you are encouraged to consult your tax advisors regarding the applicability of the 3.8% tax on net investment income to the ownership and disposition of our common stock.
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Passive Foreign Investment Company Status and Significant Tax Consequences
Special U.S. federal income tax rules apply to a U.S. Holder that holds stock in a foreign corporation classified as a PFIC for U.S. federal income tax purposes. In general, we will be treated as a PFIC with respect to a U.S. Holder if, for any taxable year in which such holder held our common stock,shares, either
at least 75% of our gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conduct of a rental business); or
at least 50% of the average value of the assets held by the corporation during such taxable year produce, or are held for the production of, passive income.
For purposes of determining whether we are a PFIC, we will be treated as earning and owning our proportionate share of the income and assets, respectively, of any of our subsidiaries'subsidiaries’ corporations in which we own at least 25% of the value of the subsidiary'ssubsidiary’s stock. Income earned, or deemed earned, by us in connection with the performance of services would not constitute "passive income"“passive income” for these purposes. By contrast, rental income would generally constitute "passive income"“passive income” unless we were treated under specific rules as deriving our rental income in the active conduct of a trade or business.
In general, income derived from the bareboat charter of a vessel will be treated as "passive income"“passive income” for purposes of determining whether we are a PFIC and such vessel will be treated as an asset which produces or is held for the production of "passive income"“passive income”. On the other hand, income derived from the time charter of a vessel should not be treated as "passive income"“passive income” for such purpose, but rather should be treated as services income; likewise, a time chartered vessel should generally not be treated as an asset which produces or is held for the production of "passive income"“passive income”.
Based on our current assets and activities, we do not believe that we will be a PFIC for the current or subsequent taxable years. Although there is no legal authority directly on point, and we are not relying upon an opinion of counsel on this issue, our belief is based principally on the position that, for purposes of determining whether we are a passive foreign investment company, the gross income we derive or are deemed to derive from the time chartering and voyage chartering activities of our wholly-owned subsidiaries should constitute services income, rather than rental income. Correspondingly, such income should not constitute passive income, and the assets that we or our wholly-owned subsidiaries own and operate in connection with the production of such income, in particular, the vessels, should not constitute passive assets for purposes of determining whether we were a passive foreign investment company. We believe there is substantial legal authority supporting our position consisting of case law and IRS pronouncements concerning the characterization of income derived from time charters and voyage charters as services income for other tax purposes. However, in the absence of any legal authority specifically relating to the statutory provisions governing passive foreign investment companies, the IRS or a court could disagree with our position. In addition, although we intend to conduct our affairs in a manner to avoid being classified as a passive foreign investment company with respect to any taxable year, we cannot assure you that the nature of our operations will not change in the future.
As discussed more fully below, if we were to be treated as a PFIC for any taxable year, a U.S. Holder would be subject to different U.S. federal income taxation rules depending on whether the U.S. Holder makes an election to treat us as a "Qualified“Qualified Electing Fund,"” which election is referred to as a "QEF Election"“QEF Election”. As discussed below, as an alternative to making a QEF Election, a U.S. Holder should be able to make a "mark-to-market"“mark-to-market” election with respect to our common stock,shares, which election is referred to as a "Mark-to-Market Election"“Mark-to-Market Election”. A U.S. Holder holding PFIC shares that does not make either a "QEF Election"“QEF Election” or "Mark-to-Market Election"“Mark-to-Market Election” will be subject to the Default PFIC Regime, as defined and discussed below in "Taxation—“Taxation—U.S. Federal Income Taxation of U.S. Holders—Taxation of U.S. Holders Not Making a Timely QEF or "Mark-to-Market" Election"“Mark-to-Market” Election”.
If the Company were to be treated as a PFIC, a U.S. Holder would be required to file IRS Form 8621 to report certain information regarding the Company. If you are a U.S. Holder who held our common shares during any period in which we are a PFIC, you are strongly encouraged to consult your tax advisor.
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The QEF Election
If a U.S. Holder makes a timely QEF Election, which U.S. Holder we refer to as an "Electing“Electing Holder,"” the Electing Holder must report each year for United States federal income tax purposes his pro rata share of our ordinary earnings and our net capital gain, if any, for our taxable year that ends with or within the taxable year of the Electing Holder, regardless of whether or not distributions were made by us to the Electing Holder. The Electing Holder'sHolder’s adjusted tax basis in the common stockshares will be increased to reflect taxed but undistributed earnings and profits. Distributions of earnings and profits that had been previously taxed will result in a corresponding reduction in the adjusted tax basis in the common stockshares and will not be taxed again once distributed. An Electing Holder would generally recognize capital gain or loss on the sale, exchange or other disposition of our common stock.shares. A U.S. Holder would make a QEF Election with respect to any year that our Company is a PFIC by filing one copy of IRS Form 8621 with his United States federal income tax return and a second copy in accordance with the instructions to such form. It should be noted that if any of our subsidiaries is treated as a corporation for U.S. federal income tax purposes, a U.S. Holder must make a separate QEF Election with respect to each such subsidiary.
Taxation of U.S. Holders Making a "Mark-to-Market"“Mark-to-Market” Election
If we are a PFIC in a taxable year and our shares are treated as “marketable stock” in such year, you may make a mark-to-market election with respect to your shares. As long as our common stock isshares are traded on an over-the-counter market,the Nasdaq Capital Market, as itthey currently isare and as itthey may continue to be, our common stock may notshares should be considered "marketable stock"“marketable stock” for purposes of making the Mark-to-Market Election. U.S. Holders are urged to consult their own tax advisors in this regard.
Taxation of U.S. Holders Not Making a Timely QEF or "Mark-to-Market"“Mark-to-Market” Election
Finally, a U.S. Holder who does not make either a QEF Election or a Mark-to-Market Election with respect to any taxable year in which we are treated as a PFIC, or a U.S. Holder whose QEF Election is invalidated or terminated, or a Non-Electing Holder, would be subject to special rules, or the Default PFIC Regime, with respect to (1) any excess distribution (i.e., the portion of any distributions received by the Non-Electing Holder on the common stockshares in a taxable year in excess of 125% of the average annual distributions received by the Non-Electing Holder in the three preceding taxable years, or, if shorter, the Non-Electing Holder'sHolder’s holding period for the common stock)shares), and (2) any gain realized on the sale, exchange, redemption or other disposition of the common stock.shares.
Under the Default PFIC Regime:
the excess distribution or gain would be allocated ratably over the Non-Electing Holder'sHolder’s aggregate holding period for the common stock;shares;
the amount allocated to the current taxable year and any taxable year before we became a PFIC would be taxed as ordinary income; and
the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed tax deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year.
Any distributions other than "excess distributions"“excess distributions” by us to a Non-Electing Holder will be treated as discussed above under "Taxation—“Taxation—U.S. Federal Income Taxation of U.S. Holders—Distributions"Distributions”.
These penalties would not apply to a pension or profit sharing trust or other tax-exempt organization that did not borrow funds or otherwise utilize leverage in connection with its acquisition of the common stock.shares. If a Non-Electing Holder who is an individual dies while owning the common stock,shares, such Non-Electing Holder'sHolder’s successor generally would not receive a step-up in tax basis with respect to the common stock.shares.
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U.S. Federal Income Taxation of "Non-U.S. Holders"“Non-U.S. Holders”
A beneficial owner of our common stockshares (other than a partnership) that is not a U.S. Holder is referred to herein as a "Non-U.S. Holder"“Non-U.S. Holder”.
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Dividends on Common StockShares
Non-U.S. Holders generally will not be subject to U.S. federal income tax or withholding tax on dividends received from us with respect to our common stock,shares, unless that income is effectively connected with a trade or business conducted by the Non-U.S. Holder in the United States. If the Non-U.S. Holder is entitled to the benefits of a U.S. income tax treaty with respect to those dividends, that income is taxable only if it is attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States.
Sale, Exchange or Other Disposition of Common StockShares
Non-U.S. Holders generally will not be subject to U.S. federal income tax or withholding tax on any gain realized upon the sale, exchange or other disposition of our common stock,shares, unless:
the gain is effectively connected with a trade or business conducted by the Non-U.S. Holder in the United States. If the Non-U.S. Holder is entitled to the benefits of a U.S. income tax treaty with respect to that gain, that gain is taxable only if it is attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States; or
the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and other conditions are met.
If the Non-U.S. Holder is engaged in a U.S. trade or business for U.S. federal income tax purposes, the income from the common stock,shares, including dividends and the gain from the sale, exchange or other disposition of the stock that is effectively connected with the conduct of that trade or business will generally be subject to U.S. federal income tax in the same manner as discussed in the previous section relating to the taxation of U.S. Holders. In addition, in the case of a corporate Non-U.S. Holder, the earnings and profits of such Non-U.S. Holder that are attributable to effectively connected income, subject to certain adjustments, may be subject to an additional branch profits tax at a rate of 30%, or at a lower rate as may be specified by an applicable U.S. income tax treaty.
Backup Withholding and Information Reporting
In general, dividend payments, or other taxable distributions, made within the United States to you will be subject to information reporting requirements. In addition, such payments will be subject to backup withholding tax if you are a non-corporate U.S. Holder and you:
fail to provide an accurate taxpayer identification number;
are notified by the IRS that you have failed to report all interest or dividends required to be shown on your U.S. federal income tax returns; or
in certain circumstances, fail to comply with applicable certification requirements.
Non-U.S. Holders may be required to establish their exemption from information reporting and backup withholding by certifying their status on an applicable IRS Form W-8.
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If you sell your common stockshares to or through a U.S. office of a broker, the payment of the proceeds is subject to both U.S. backup withholding and information reporting unless you certify that you are a non-U.S. person, under penalties of perjury, or you otherwise establish an exemption. If you sell your common stockshares through a non-U.S. office of a non-U.S. broker and the sales proceeds are paid to you outside the United States, then information reporting and backup withholding generally will not apply to that payment. However, U.S. information reporting requirements, but notand in certain cases backup withholding requirements, will apply to a payment of sales proceeds, even if that payment is made to you outside the United States, if you sell your common stockshares through a non-U.S. office of a broker that is a U.S. person or has some other contacts with the United States. Backup withholding tax is not an additional tax. Rather, you generally may obtain a refund of any amounts withheld under backup withholding rules that exceed your U.S. federal income tax liability by filing a refund claim with the IRS.
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Individuals who are U.S. Holders (and to the extent specified in applicable Treasury Regulations, certain individuals who are Non-U.S. Holders and certain U.S. entities) who hold "specified“specified foreign financial assets"assets” (as defined in Section 6038D of the Code) are required to file IRS Form 8938 with information relating to the asset for each taxable year in which the aggregate value of all such assets exceeds $75,000 at any time during the taxable year or $50,000 on the last day of the taxable year (or such higher dollar amount as prescribed by applicable Treasury Regulations). Specified foreign financial assets would include, among other assets, our common shares, unless the shares are held through an account maintained with a U.S. financial institution. Substantial penalties apply to any failure to timely file IRS Form 8938, unless the failure is shown to be due to reasonable cause and not due to willful neglect. Additionally, in the event an individual U.S. Holder (and to the extent specified in applicable Treasury regulations, an individual Non-U.S. Holder or a U.S. entity) that is required to file IRS Form 8938 does not file such form, the statute of limitations on the assessment and collection of U.S. federal income taxes of such holder for the related tax year may not close until three years after the date that the required information is filed. U.S. Holders (including U.S. entities) and Non-U.S. Holders are encouraged to consult their own tax advisors regarding their reporting obligations under this legislation.
Other Tax Considerations
In addition to the income tax consequences discussed above, the Company may be subject to tax, including tonnage taxes, in one or more other jurisdictions where the Company conducts activities. All our vessel-owning subsidiaries are subject to tonnage taxes. Generally, under a tonnage tax, a company is taxed based on the net tonnage of qualifying vessels such company operates, independent of actual earnings. The amount of any suchtonnage tax imposed upon our operations may be material.
F.Dividends and Paying Agents
Not applicable.
G.Statement by Experts
Not applicable.
H.Documents on Display
We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended. In accordance with these requirements, we file reports and other information with the SEC. These materials, including this annual report and the accompanying exhibits may be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, NE, Room 1580, Washington, D.C. 20549. The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements and other information that we and other registrants have filed electronically with the SEC. Our filings are also available on our website at www.castormaritime.com. This web address is provided as an inactive textual reference only. Information contained on, our websiteor that can be accessed through, these websites, does not constitute part of, and is not incorporated into, this annual report.
Shareholders may also request a copy of our filings at no cost, by writing or telephoning us at the following address:
Castor Maritime Inc.

223 Christodoulou Chatzipavlou Street

Hawaii Royal Gardens

3036 Limassol, Cyprus

Tel: + 357 25 357 767
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I.Subsidiary Information
Not applicable.

ITEM 11.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to various market risks, including foreign currency fluctuations, changes in interest rates and credit risk. Our activities expose us primarily to the financial risks of changes in interest rates and foreign currency exchange rates and interest rates as described below.
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Interest Rate Risk
The international shipping industry is capital intensive, requiring significant amounts of investment provided in the form of long-term debt. A significant portion or our debt contains floating interest rates that fluctuate with changes in the financial markets and in particular changes in LIBOR.LIBOR, which is the relevant reference under the majority of our credit facilities. Increasing interest rates could increase our interest expense and adversely impact our future results of operations. As of December 31, 2020,2021, our net effective exposure to floating interest rate fluctuations on our outstanding debt was $13.5$103.8 million. Our interest expense is affected by changes in the general level of interest rates, particularly LIBOR. As an indication of the extent of our sensitivity to interest rate changes, an increase in LIBOR of 1% would have increaseddecreased our net lossincome in the year ended December 31, 20202021 by approximately $0.1$0.6 million based upon our floating interest-bearing average debt level during 2020.2021. We expect our sensitivity to interest rate changes to increase in the future ifas we enter into additional debt agreements in connection with vessel acquisitions, including those using alternative reference rates such as  SOFR. At this time, we have one credit facility that uses adjusted SOFR as the relevant reference rate and therefore do not currently view changes to SOFR as having a material effect on our previously announced and/or potential acquisitions of vessels from affiliated or unaffiliated third parties.business. For further information on the risks associated with our business,interest rates, please see "Item“Item 3. Key Information—D. Risk Factors" Factors— A considerable amount of our outstanding debt is exposed to Interbank Offered Rate (“LIBOR”) Risk. We may be adversely affected by the transition from LIBOR as a reference rate and are exposed to volatility in LIBOR and the Secured Overnight Financing Rate, or SOFR. If volatility in LIBOR and/or SOFR occurs, the interest on our indebtedness could be higher than prevailing market interest rates and our profitability, earnings and cash flows may be adversely affected” for a discussion on the risks associated with LIBOR and SOFR, among others.
Foreign Currency Exchange Rate Risk
We generate all of our revenue in U.S. dollars. TheA minority of our vessels'vessels’ operating expenses (approximately 18.0%12.1% for the year ended December 31, 2020)2021 and the minority of our general and administrative expenses (approximately 10.2%11.5%) are in currencies other than the U.S. dollar, primarily the Euro and Japanese Yen. For accounting purposes, expenses incurred in other currencies are converted into U.S. dollars at the exchange rate prevailing on the date of each transaction. We do not consider the risk from exchange rate fluctuations to be material for our results of operations because as of December 31, 2020,2021, these non-US dollar expenses represented 11.7%3.9% of our revenues. However, the portion of our business conducted in other currencies could increase in the future, which could increase our exposure to losses arising from exchange rate fluctuations.
Inflation Risk
Inflation has not had a material effect on our expenses given recent economic conditions.in the preceding fiscal year. In the event that significant global inflationary pressures appear, these pressures would increase our operating costs.

ITEM 12.DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
Not applicable.
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PART II

ITEM 13.DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
The accumulated, but not declared, due and overdue dividends on the Series A Preferred Shares as of September 30, 2018 and December 31, 2018, 2019 and 2020, amounted to $1,646,775, $2,668,770, $0 and $0, respectively.
On October 10, 2019, we reached an agreement with the holders of our Series A Preferred Shares to settle in full all accumulated dividend obligations on the Series A Preferred Shares, or the Series A Dividends Settlement Agreement, and to simultaneously adopt an Amended and Restated Statements of Designations on our Series A Preferred Shares, or the Series A Amended SOD. Pursuant to the Series A Dividends Settlement Agreement, the Series A Preferred holders agreed to waive our obligations related to all due and overdue accumulated dividends on the Series A Preferred Shares during the period from their original issue date up to and including June 30, 2019, amounting to $4.3 million, and to receive, in settlement thereof, 300,000 newly issued common shares, or the Settlement Shares. The Settlement Shares were issued to the Series A Preferred holders on October 17, 2019. In addition, in accordance with the terms of the Series A Amended SOD, we and the Series A Preferred holders mutually agreed to waive all dividend payment obligations on the Series A Preferred Shares during the period from July 1, 2019 until December 31, 2021, reduce the progressively increasing dividend payment default rate that is 1.30 times the rate payable on the Series A Preferred Shares on the date preceding such payment to a fixed dividend payment default rate that is 1.30 times the base dividend payment rate, increase the redemption price of the Series A Preferred Shares to $30 from $25 per share, in case we exercise our current option to redeem the Series A Preferred Shares, in whole or in part, with cash, and increase the liquidation preference from $25 to $30 per Series A Preferred Share. As a result of the foregoing, dividends on the Series A Preferred Shares will neither accrue nor accumulate during the period from July 1, 2019 until December 31, 2021, and we will no longer have any restriction declaring dividends to holders of our common shares during this period.Not applicable.

ITEM 14.MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
We have adopted the Stockholders Rights Agreement, pursuant to which each share of our common stockshares includes one preferred shares purchase right that entitles the holder to purchase from us a unit consisting of one-thousandth of a share of our Series C Participating Preferred Shares if any third party seeks to acquire control of a substantial block of our common stockshares without the approval of our Board. See "Item“Item 10. Additional Information—B. Memorandum and Articles of Association—Stockholders Rights Agreement" Agreement” included in this annual report and Exhibit 2.2 to this annual report for a description of our Stockholders Rights Agreement.
Please also see "Item“Item 10. Additional Information—B. Memorandum and Articles of Association"Association” for a description of the rights of holders of our Series A cumulative redeemable perpetual preferred shares and Series B Preferred Shares relative to the rights of holders of shares of our common stock.shares.

ITEM 15.CONTROLS AND PROCEDURES
A.Disclosure Controls and Procedures
Management,
As of December 31, 2021, our management conducted an evaluation pursuant to Rules 13a-15(e) and 15d-15(e) promulgated under the supervision and with the participationExchange Act, as amended, of our Chairman, Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant toas defined in Rules 13a-15(e) orand 15d-15(e) promulgated under the Exchange Act, as of the end of the period covered by this annual report, as of December 31, 2020.Act.
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The term disclosure controls and procedures areis defined under SEC rules as controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC'sSEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer'sissuer’s management including its Chief Executive and Chief Financial Officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.
Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the partnership have been detected. Further, in the design and evaluation of our disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Based upon that evaluation, our Chairman, Chief Executive Officer and Chief Financial Officermanagement concluded that, as of December 31, 2021, our disclosure controls and procedures arewhich include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to management, as appropriate to allow timely decisions regarding required disclosure, were effective asin providing reasonable assurance that information that was required to be disclosed by us in reports we file or submit under the Exchange Act was recorded, processed, summarized and reported within the time periods specified in the rules and forms of December 31, 2020.the SEC.
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B.Management'sManagement’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) promulgated under the Securities Exchange Act of 1934.
Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a processAct. Our internal controls were designed by, or under the supervision of, the Company's Chief Executive and Chief Financial Officer, Mr. Petros Panagiotidis, and effected by the Company's Board, management and other personnel, to provide reasonable assurance regardingas to the reliability of our financial reporting and the preparation and presentation of our financial statements for external purposes in accordance with accounting principles generally accepted accounting principles andin the United States.
Our internal controls over financial reporting includes those policies and procedures that:
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of Company'sCompany’s management and directors; and
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
Because
Our management conducted an evaluation of the effectiveness of our internal control over financial reporting based upon the 2013 framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation. Based on this evaluation, our management believes that our internal control over financial reporting was effective as of December 31, 2021.
However, because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate.
Management conducted the evaluation of the effectiveness of the internal controls over financial reporting using the control criteria framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in its report entitled Internal Control-Integrated Framework (2013).
Our management with the participation of our Chief Executive Officer and Chief Financial Officer assessed the effectiveness of the design and operation of the Company's internal controls over financial reporting pursuant to Rule 13a-15 of the Securities Exchange Act of 1934, as of December 31, 2020. Based upon that evaluation, our management with the participation of our Chief Executive Officer and Chief Financial Officer concluded that the Company's internal controls over financial reporting are effective as of December 31, 2020.
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C.Attestation Report of the Registered Public Accounting Firm
This annual report does not include an attestation report of the Company'sCompany’s registered public accounting firm regarding internal control over financial reporting. Management'sManagement’s report was not subject to attestation by the Company'sCompany’s registered public accounting firm, since, as an "emerging“emerging growth company"company”, we are exempt from having our independent auditor assess our internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act.
D.Changes in Internal Control Over Financial Reporting
There have been no significant changes in internal control over financial reporting that occurred during the period covered by this annual report that have materially affected or are reasonably likely to materially affect the Company'sCompany’s internal control over financial reporting.

ITEM 16.RESERVED
ITEM 16A.AUDIT COMMITTEE FINANCIAL EXPERT
The Board has determined that Mr. Georgios Daskalakis, who serves as Chairman of the Audit Committee, qualifies as an "audit“audit committee financial expert"expert” under SEC rules, and that Mr. Daskalakis is "independent"“independent” under applicable Nasdaq rules and SEC standards.
ITEM 16B.CODE OF ETHICS
We adopted a code of ethics that applies to any of our employees, including our principal executiveChief Executive Officer and financial officer.Chief Financial Officer. The code of ethics may be downloaded from our website (www.castormaritime.com). Additionally, any person, upon request, may receive a hard copy or an electronic file of the code of ethics at no cost. If we make any substantive amendment to the code of ethics or grant any waivers, including any implicit waiver, from a provision of our code of ethics, we will disclose the nature of that amendment or waiver on our website. During the year ended December 31, 2020,2021, no such amendment was made, or waiver granted.
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ITEM 16C.PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees
Aggregate fees billed to the Company for the years ended December 31, 20192020, and 20202021 represent fees billed by our principal accounting firm, Deloitte Certified Public Accountants S.A., an independent registered public accounting firm and member of Deloitte Touche Tohmatsu, Limited. Audit fees represent compensation for professional services rendered for the audit of the consolidated financial statements of the Company and for the review of the quarterly financial information as well as in connection with the review of registration statements and related consents and comfort letters and any other audit services required for SEC or other regulatory filings. No other non-audit, tax or other fees were charged.
For the year ended  For the year ended 
In U.S. dollarsDecember 31, 2019 December 31, 2020  December 31, 2020  December 31, 2021 
Audit Fees 140,385  188,750  188,750  367,000 
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Audit-Related Fees
Not applicable.
Tax Fees
Not applicable.
All Other Fees
Not applicable.
Audit Committee'sCommittee’s Pre-Approval Policies and Procedures
Our audit committee pre-approves all audit, audit-related and non-audit services not prohibited by law to be performed by our independent auditors and associated fees prior to the engagement of the independent auditor with respect to such services.
ITEM 16D.EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Not applicable.
ITEM 16E.PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PERSONS.
Not applicable.
ITEM 16F.CHANGE IN REGISTRANT`S CERTIFYING ACCOUNTANT.
Not applicable.
ITEM 16G.CORPORATE GOVERNANCE
Pursuant to an exception under the Nasdaq listing standards available to foreign private issuers, we are not required to comply with all of the corporate governance practices followed by U.S. companies under the Nasdaq listing standards, which are available at www.nasdaq.com, because in certain cases we follow our home country (Marshall Islands) practice. Pursuant to Section 5600 of the Nasdaq Listed Company Manual, we are required to list the significant differences between our corporate governance practices that comply with and follow our home country practices and the Nasdaq standards applicable to listed U.S. companies. Set forth below is a list of those differences:
Independence of Directors. The Nasdaq requires that a U.S. listed company maintain a majority of independent directors. While our Board is currently comprised of three directors a majority of whom are independent, we cannot assure you that in the future we will have a majority of independent directors.
Executive Sessions. The Nasdaq requires that non-management directors meet regularly in executive sessions without management. The Nasdaq also requires that all independent directors meet in an executive session at least once a year. As permitted under Marshall Islands law and our bylaws, our non-management directors do not regularly hold executive sessions without management.
Nominating/Corporate Governance Committee. The Nasdaq requires that a listed U.S. company have a nominating/corporate governance committee of independent directors and a committee charter specifying the purpose, duties and evaluation procedures of the committee. As permitted under Marshall Islands law and our bylaws, we do not currently have a nominating or corporate governance committee.
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Audit Committee.  The Nasdaq requires, among other things, that a listed U.S. company have an audit committee with a minimum of three members, all of whom are independent. As permitted by Rule 10A-3 under the Securities Exchange Act of 1934, our audit committee consists of two independent members of our Board, Mr. Georgios Daskalakis and Mr. Dionysios Makris.
Shareholder Approval Requirements. The Nasdaq requires that a listed U.S. company obtain prior shareholder approval for certain issuances of authorized stock or the approval of, and material revisions to, equity compensation plans. As permitted under Marshall Islands law and our bylaws, we do not seek shareholder approval prior to issuances of authorized stock or the approval of and material revisions to equity compensation plans.
Corporate Governance Guidelines. The Nasdaq requires U.S. companies to adopt and disclose corporate governance guidelines. The guidelines must address, among other things: director qualification standards, director responsibilities, director access to management and independent advisers, director compensation, director orientation and continuing education, management succession and an annual performance evaluation of the Board. We are not required to adopt such guidelines under Marshall Islands law and we have not adopted such guidelines.
•
Independence of Directors. The Nasdaq requires that a U.S. listed company maintain a majority of independent directors. While our Board is currently comprised of three directors a majority of whom are independent, we cannot assure you that in the future we will have a majority of independent directors.
•
Executive Sessions. The Nasdaq requires that non-management directors meet regularly in executive sessions without management. The Nasdaq also requires that all independent directors meet in an executive session at least once a year. As permitted under Marshall Islands law and our bylaws, our non-management directors do not regularly hold executive sessions without management.
•
Nominating/Corporate Governance Committee. The Nasdaq requires that a listed U.S. company have a nominating/corporate governance committee of independent directors and a committee charter specifying the purpose, duties and evaluation procedures of the committee. As permitted under Marshall Islands law and our bylaws, we do not currently have a nominating or corporate governance committee.
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Compensation Committee. The Nasdaq requires U.S. listed companies to have a compensation committee composed entirely of independent directors and a committee charter addressing the purpose, responsibility, rights and performance evaluation of the committee. As permitted under Marshall Islands law, we do not currently have a compensation committee. To the extent we establish such committee in the future, it may not consist of independent directors, entirely or at all.
•
Audit Committee. The Nasdaq requires, among other things, that a listed U.S. company have an audit committee with a minimum of three members, all of whom are independent. As permitted by Nasdaq Rule 5615(a)(3), we follow home country practice regarding audit committee composition and therefore our audit committee consists of two independent members of our Board, Mr. Georgios Daskalakis and Mr. Dionysios Makris. Although the members of our audit committee are independent, we are not required to ensure their independence under Nasdaq Rule 5605(c)(2)(A) subject to compliance with Rules 10A-3(b)(1) and 10A-3(c) under the Securities Exchange Act of 1934.
•
Shareholder Approval Requirements. The Nasdaq requires that a listed U.S. company obtain prior shareholder approval for certain issuances of authorized stock or the approval of, and material revisions to, equity compensation plans. As permitted under Marshall Islands law and our bylaws, we do not seek shareholder approval prior to issuances of authorized stock or the approval of and material revisions to equity compensation plans.
•
Corporate Governance Guidelines. The Nasdaq requires U.S. companies to adopt and disclose corporate governance guidelines. The guidelines must address, among other things: director qualification standards, director responsibilities, director access to management and independent advisers, director compensation, director orientation and continuing education, management succession and an annual performance evaluation of the Board. We are not required to adopt such guidelines under Marshall Islands law and we have not adopted such guidelines.
ITEM 16H.MINE SAFETY DISCLOSURE
Not applicable.
ITEM 16I.DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
PART III

ITEM 17.FINANCIAL STATEMENTS
See Item 18.

ITEM 18.FINANCIAL STATEMENTS
The financial information required by this Item is set forth on pages F-1 to F-31F-35 filed as part of this annual report.
86

ITEM 19.EXHIBITS
1.1
Articles of Incorporation of the Company incorporated by reference to Exhibit 3.1 to the Company’s registration statement on Form F-4 filed with the Securities and Exchange CommissionSEC on April 11, 2018.
  
1.2
Articles of Amendment to the Articles of Incorporation of the Company, as amended, filed with the Registry of the Marshall Islands on May 27, 2021 incorporated by reference to Exhibit 99.1 to Amendment No. 2 to Form 8-A filed with the SEC on May 28, 2021.
1.3
Bylaws of the Company incorporated by reference to Exhibit 3.2 to the Company'sCompany’s registration statement on Form F-4 filed with the Securities and Exchange CommissionSEC on April 11, 2018.
  
2.1
Form of Common Share Certificate incorporated by reference to Exhibit 4.199.2 of the Company's registration statement onAmendment No. 2 to Form F-48-A filed with the Securities and Exchange CommissionSEC on April 11, 2018.
May 28, 2021.
  
2.2
Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.
  
2.3
Form of Class A Warrantwarrant incorporated by reference to Exhibit 4.24.8 of Amendment No. 2 to the Company's reportCompany’s registration statement on Form 6-K furnished toF-1 filed with the Securities and Exchange CommissionSEC on June 29,23, 2020.


100

2.4
Form of Common Share Purchase Warrant incorporated by reference to Exhibit 4.3 of the Company's report on Form 6-K furnished to the Securities and Exchange Commission on July 15, 2020.
  
4.1
2.4
Form of Pre-Funded warrant incorporated by reference to Exhibit 4.9 of Amendment No. 2 to the Company’s registration statement on Form F-1 filed with the SEC on June 23, 2020.
4.1
Stockholder Rights Agreement dated as of November 20, 2017 by and between the Company and American Stock Transfer & Trust Company, LLC, as rights agent incorporated by reference to Exhibit 10.2 to the Company'sCompany’s registration statement on Form F-4 filed with the Securities and Exchange CommissionSEC on April 11, 2018.
  
4.2
Statement of Designation of the Rights, Preferences and Privileges of the 9.75% Series A Cumulative Redeemable Perpetual Preferred Shares of the Company, filed with the Registrar of Corporations of the Republic of the Marshall Islands on September 22, 2017, incorporated by reference to Exhibit 3.3 to the Company'sCompany’s registration statement on Form F-4 filed with the Securities and Exchange CommissionSEC on April 11, 2018.
  
4.3
Amended and Restated Statement of Designation of the Rights, Preferences and Privileges of the 9.75% Series A Cumulative Redeemable Perpetual Preferred Shares of the Company, filed with the Registrar of Corporations of the Republic of the Marshall Islands on October 10, 2019, incorporated by reference to Exhibit 99.2 of the Company'sCompany’s report on Form 6-K furnished with the Securities and Exchange CommissionSEC on October 11, 2019.
  
4.4
Statement of Designation of the Rights, Preferences and Privileges of the Rights, Preferences and Privileges of the Series B Preferred Shares of the Company, filed with the Registrar of Corporations of the Republic of the Marshall Islands on September 22, 2017, and incorporated by reference to Exhibit 3.4 to the Company'sCompany’s registration statement on Form F-4 filed with the Securities and Exchange CommissionSEC on April 11, 2018.
  
4.5
Statement of Designation of the Rights, Preferences and Privileges of the Rights, Preferences and Privileges of the Series C Participating Preferred Shares of the Company, filed with the Registrar of Corporations of the Republic of the Marshall Islands on November 29, 2017, and incorporated by reference to Exhibit 3.5 to the Company'sCompany’s registration statement on Form F-4 filed with the Securities and Exchange CommissionSEC on April 11, 2018.
  
4.6
Amended and Restated Statement of Designations of Rights, Preferences and Privileges of Series C Participating Preferred Stock of Castor Maritime Inc., filed with the Registrar of Corporations of the Republic of the Marshall Islands on March 30, 2022.
4.7
Securities Purchase Agreement by and between the Company and YAII PN, Ltd. dated January 27, 2020 incorporated by reference to Exhibit 10.1 of the Company'sCompany’s report on Form 6-K furnished with the Securities and Exchange Commission on January 31, 2020.

87
4.8
4.7
Registration Rights Agreement by and between the Company and YAII PN, Ltd. dated January 27, 2020 incorporated by reference to Exhibit 10.2 of the Company'sCompany’s report on Form 6-K furnished with the Securities and Exchange CommissionSEC on January 31, 2020.
  
4.8
4.9
Form of Convertible Debenture incorporated by reference to Exhibit 10.3 of the Company'sCompany’s report on Form 6-K furnished with the Securities and Exchange CommissionSEC on January 31, 2020.
  
4.9
4.10
Exchange Agreement dated September 22, 2017, between the Company, Spetses Shipping Co., and the shareholders of Spetses Shipping Co., incorporated by reference to Exhibit 10.1 of the Company'sCompany’s registration statement on Form F-4 filed with the Securities and Exchange CommissionSEC on April 11, 2018.
  
4.10
4.11
Waiver and Consent Agreement entered into by the Company and all holders of the issued and outstanding 9.75% Series A Cumulative Redeemable Perpetual Preferred Shares, dated October 10, 2019 incorporated by reference to Exhibit 99.3 of the Company'sCompany’s report on Form 6-K furnished with the Securities and Exchange CommissionSEC on October 11, 2019.
  
4.11
4.12
$5.0 Million Term Loan Facility, dated August 30, 2019, between Thalassa Investment Co. S.A., as lender, and the Company, as borrower, incorporated by reference to Exhibit 4.7 of the Company'sCompany’s transition report on Form 20-F filed with the Securities and Exchange CommissionSEC on December 16, 2019.
  
4.12
4.13
$7.5First Supplemental Agreement to the $5.0 Million BridgeTerm Loan Facility, dated October 17,August 30, 2019, between Thalassa Investment Co. S.A., as lender, and the Company, as borrower, incorporated by reference to Exhibit 4.84.16 of the Company's transitionCompany’s annual report on Form 20-F filed with the Securities and Exchange CommissionSEC on December 16, 2019.
March 3, 2021.
  
4.13
4.14
$11.0 Million Secured Term Loan Facility, dated November 22, 2019, by and among Alpha Bank A.E.S,A., as lender, and Pikachu Shipping Co. and Spetses Shipping Co., as borrowers, incorporated by reference to Exhibit 4.9 of the Company'sCompany’s transition report on Form 20-F filed with the Securities and Exchange CommissionSEC on December 16, 2019.
4.15


101

4.14
The $4.5$4.5 Million Secured Loan Agreement, dated January 23, 2020, by and among Chailease International Financial Services Co., Ltd., as lender, Bistro Maritime Co., as borrower, and the Company and Pavimar S.A., as guarantors, incorporated by reference to Exhibit 10.1 of the Company'sCompany’s report on Form 6-K furnished with the Securities and Exchange CommissionSEC on February 4, 2020.
  
4.15
4.16
$15.315.29 Million Term Loan Facility, dated January 22, 2021, by and among Hamburg Commercial Bank AG and the banks and financial institutions listed in Schedule 1 thereto, as lenders, and Pocahontas Shipping Co. and Jumaru Shipping Co., as borrowers.
borrowers, incorporated by reference to Exhibit 4.15 of the Company’s annual report on Form 20-F filed with the SEC on March 3, 2021.
  
4.16
4.17
First Supplemental Agreement to the $5.0$18.0 Million Term Loan Facility, dated August 30, 2019,April 27, 2021, between Thalassa Investment Co.Alpha Bank S.A., as lender, and the Company,Gamora Shipping Co. and Rocket Shipping Co., as borrower.
borrowers.
  
4.17
4.18
$40.75 Million Term Loan Facility, dated July 23, 2021, by and among Hamburg Commercial Bank AG and the banks and financial institutions listed in Schedule 1 thereto, and Liono Shipping Co., Snoopy Shipping Co., Cinderella Shipping Co., and Luffy Shipping Co., as borrowers.
4.19
$23.15 Million Term Loan Facility, dated November 22, 2021, by and among Chailease International Financial Services Co., Ltd., as lender, and Bagheera Shipping Co. and Garfield Shipping Co., as borrowers.
4.20
$55.0 Million Term Loan Facility, dated January 12, 2022, by and among Deutsche Bank AG, as lender, and Mulan Shipping Co., Johnny Bravo Shipping Co., Songoku Shipping Co., Asterix Shipping Co. and Stewie Shipping Co., as borrowers.
4.21
Master Management Agreement, dated September 1, 2020, by and among the Company, its shipowning subsidiaries and Castor Ships S.A., incorporated by reference to Exhibit 99.3 of the Company'sCompany’s report on Form 6-K furnished with the Securities and Exchange CommissionSEC on September 11, 2020.

88
4.22
4.18
Securities Purchase Agreement by and between the Company and the purchasers identified on the signature pages thereto, dated July 12, 2020, incorporated by reference to Exhibit 4.2 of the Company'sCompany’s report on Form 6-K furnished with the Securities and Exchange CommissionSEC on July 15, 2020.
4.23
Securities Purchase Agreement by and between the Company and the purchasers identified on the signature pages thereto, dated December 30, 2020, incorporated by reference to Exhibit 4.2 of the Company’s report on Form 6-K furnished with the SEC on January 5, 2021.
4.24
Securities Purchase Agreement by and between the Company and the purchasers identified on the signature pages thereto, dated January 8, 2021, incorporated by reference to Exhibit 4.2 of the Company’s report on Form 6-K furnished with the SEC on January 12, 2021.
4.25
Securities Purchase Agreement by and between the Company and the purchasers identified on the signature pages thereto, dated April 5, 2021, incorporated by reference to Exhibit 4.2 of the Company’s report on Form 6-K furnished with the SEC on April 7, 2021.
4.26
Amended and Restated Equity Distribution Agreement, dated March 31, 2022, by and among the Company and Maxim Group LLC, incorporated by reference to Exhibit 1.3 of Amendment No. 1 to the Company’s registration statement on Form F-3 filed with the SEC on March 31, 2022.
  
8.1
List of Subsidiaries
Subsidiaries.
  
12.1
Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer and Chief Financial Officer.
  
12.2
Rule 13a-14(a) /15d-14(a) Certification of the Chief Financial Officer.13.1
13.1
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
13.2
Certification of theand Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
  
15.1
Consent of Independent Registered Public Accounting Firm
Firm.
  
101.INSInline XBRL Instance Document
  
101.SCHInline XBRL Taxonomy Extension Schema Document
  
101.CALInline XBRL Taxonomy Extension Schema Calculation Linkbase Document
  
101.DEFInline XBRL Taxonomy Extension Schema Definition Linkbase Document
  
101.LABInline XBRL Taxonomy Extension Schema Label Linkbase Document
  
101.PREInline XBRL Taxonomy Extension Schema Presentation Linkbase Document
104Cover Page Interactive Data File (Inline XBRL)


102



SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and has duly caused and authorized the undersigned to sign this annual report on its behalf.


  CASTOR MARITIME INC.
   
/s/ Petros Panagiotidis March 30, 202131, 2022
Name:  Petros Panagiotidis  
Title: Chairman, Chief Executive Officer and

Chief Financial Officer		  



10389


INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 


 Page
Report of Independent Registered Public Accounting Firm (PCAOB ID 1163)
F-2
  
Consolidated Balance Sheets as of December 31, 20192020, and 20202021
F-3
  
Consolidated Statements of Comprehensive Income/(Loss) for the year ended September 30, 2018, the Transition Period ended December 31, 2018 and the years ended December 31, 2019, 2020 and 20202021
F-4
  
Consolidated Statements of Shareholders’ Equity for the year ended September 30, 2018, the Transition Period ended December 31, 2018 and the years ended December 31, 2019, 2020 and 20202021
F-5
  
Consolidated Statements of Cash Flows for the year ended September 30, 2018, the Transition Period ended December 31, 2018 and the years ended December 31, 2019, 2020, and 20202021
F-6
  
Notes to Consolidated Financial Statements
F-7



F-1


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Castor Maritime Inc.,
Majuro, Republic of the Marshall Islands

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Castor Maritime Inc. and subsidiaries (the "Company"“Company”) as of December 31, 20202021 and 2019,2020, the related consolidated statements of comprehensive income,income/loss, shareholders’ equity, and cash flows, for the year ended September 30, 2018,each of the three monthsyears in the period ended December 31, 2018, the year ended December 31, 2019 and the year ended December 31, 2020,2021, and the related notes (collectively referred to as the "financial statements"“financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20202021 and 2019,2020, and the results of its operations and its cash flows for the year ended September 30, 2018,each of the three monthsyears in the period ended December 31, 2018, the year ended December 31, 2019 and the year ended December 31, 2020,2021, in conformity withaccounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company'sCompany’s management. Our responsibility is to express an opinion on the Company'sCompany’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Deloitte Certified Public Accountants S.A.
Athens, Greece
March 30, 2021
31, 2022
We have served as the Company'sCompany’s auditor since 2017.

F-2


CASTOR MARITIME INC. 
CONSOLIDATED BALANCE SHEETS 
December 31, 2019 and 2020 
(Expressed in U.S. Dollars – except for share data)
 
ASSETS
    December 31,  December 31, 
CURRENT ASSETS: Note  2019  2020 
Cash and cash equivalents    $4,558,939  $8,926,903 
Accounts receivable trade, net     216,485   1,302,218 
Due from related party  3   759,386   1,559,132 
Inventories      143,534   714,818 
Prepaid expenses and other assets      375,255   1,061,083 
Deferred charges, net      167,298   — 
Total current assets      6,220,897   13,564,154 
             
NON-CURRENT ASSETS:            
Vessels, net  5   23,700,029   58,045,628 
Restricted cash  6   500,000   500,000 
Prepaid expenses and other assets, non-current  6   —   200,000 
Deferred charges, net  4   —   2,061,573 
Total non-current assets      24,200,029   60,807,201 
             
Total assets     $30,420,926  $74,371,355 
             
LIABILITIES AND SHAREHOLDERS' EQUITY            
             
CURRENT LIABILITIES:            
Current portion of long-term debt, net  6   1,522,895   2,102,037 
Current portion of long-term debt, related party  3, 6   —   5,000,000 
Accounts payable      410,592   2,078,695 
Due to related party, current  3   —   1,941 
Deferred revenue, net      493,015   108,125 
Accrued liabilities (including $100,000 and $405,000 accrued interest to related party for years ended December 31,2019 and 2020, respectively)
  3   556,248   1,613,109 
Total current liabilities      2,982,750   10,903,907 
             
Commitments and contingencies  9         
             
NON-CURRENT LIABILITIES:            
Long-term debt, net  6   9,234,165   11,083,829 
Long-term debt, related party  3, 6   5,000,000   — 
Total non-current liabilities      14,234,165   11,083,829 
             
SHAREHOLDERS' EQUITY:            
Common shares, $0.001 par value; 1,950,000,000 shares authorized; 3,318,112 shares issued and outstanding as of December 31, 2019 and 131,212,376 issued and outstanding as of December 31, 2020  7   3,318   131,212 
Preferred shares, $0.001 par value: 50,000,000 shares authorized:  7         
Series A Preferred Shares- 9.75% cumulative redeemable perpetual preferred shares (liquidation preference of $30 per share), 480,000 shares issued and outstanding as of December 31, 2019 and 2020, respectively  7   480   480 
Series B Preferred Shares – 12,000 shares issued and outstanding as of December 31, 2019 and 2020, respectively  7   12   12 
Additional paid-in capital      12,763,403   53,568,650 
Retained earnings/ (Accumulated deficit)      436,798   (1,316,735)
Total shareholders' equity      13,204,011   52,383,619 
             
Total liabilities and shareholders' equity     $30,420,926  $74,371,355 
The accompanying notes are an integral part of these consolidated financial statements.
F-3

CASTOR MARITIME INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
For the year ended September 30, 2018, the Transition Period ended December 31, 2018 and the years ended December 31, 2019 and 2020
(Expressed in U.S. Dollars – except for share data)


     
Year Ended
September 30,
  
Three Months Ended
December 31,
  
Year Ended
December 31,
  
Year Ended
December 31,
 
  Note  2018  2018  2019  2020 
REVENUES:               
Vessel revenues (net of commissions to charterers of $153,406, $43,125 ,$302,556 and $629,015 respectively)    $3,960,822  $1,111,075  $5,967,772  $12,487,692 
Total revenues     3,960,822   1,111,075   5,967,772   12,487,692 
                    
EXPENSES:                   
Voyage expenses (including $40,471 and $29,769 to related parties for the years ended December 31, 2019 and 2020, respectively)  3,12   (37,373)  (19,556)  (261,179)  (584,705)
Vessel operating expenses  12   (1,727,770)  (432,544)  (2,802,991)  (7,447,439)
Management fees to related parties  3   (111,480)  (29,440)  (212,300)  (930,500)
Depreciation and amortization  4,5   (637,611)  (177,378)  (897,171)  (1,904,963)
Provision for doubtful accounts  2   —   —   —   (37,103)
General and administrative expenses  13                 
- Company administration expenses (including $400,000 to related party for the year ended December 31, 2020)      (109,233)  (22,954)  (378,777)  (1,130,953)
- Public registration costs      (350,167)  (161,116)  (132,091)  — 
Total expenses      (2,973,634)  (842,988)  (4,684,509)  (12,035,663)
                     
Operating income      987,188   268,087   1,283,263   452,029 
                     
OTHER INCOME/ (EXPENSES):                    
Interest and finance costs (including $162,500 and $305,000 to related party for years ended December 31, 2019 and 2020, respectively)  3,6, 14   (3,393)  (519)  (222,163)  (2,189,577)
Interest income      4,243   7,985   31,589   34,976 
Foreign exchange (losses)/ gains      (8,539)  89   (4,540)  (29,321)
Other, net      1,439   800   —   — 
Total other income/ (expenses), net      (6,250)  8,355   (195,114)  (2,183,922)
                     
Net income/(loss) and comprehensive income/(loss), before taxes     $980,938  $276,442  $1,088,149  $(1,731,893)
 US Source Income Taxes  10   —   —   —   (21,640)
Net income/(loss) and comprehensive income/(loss)     $980,938  $276,442  $1,088,149  $(1,753,533)
                     
(Loss)/ Earnings per common share, basic and diluted  11  $(0.28) $(0.30) $0.31  $(0.03)
Weighted average number of common shares, basic and diluted      2,400,000   2,400,000   2,662,383   67,735,195 
The accompanying notes are an integral part of these consolidated financial statements.
F-4
CASTOR MARITIME INC.
CONSOLIDATED BALANCE SHEETS

December 31, 2020 and 2021

(Expressed in U.S. Dollars – except for share data)

ASSETS   December 31,  December 31, 
CURRENT ASSETS: Note  2020  2021 
Cash and cash equivalents    $8,926,903  $37,173,736 
Restricted Cash
  7
   0   2,382,732 
Accounts receivable trade, net      1,302,218   8,224,357 
Due from related party  3   1,559,132   0 
Inventories      714,818   4,436,879 
Prepaid expenses and other assets      1,061,083   2,591,150 
Deferred charges, net      0   191,234 
Total current assets      13,564,154   55,000,088 
             
NON-CURRENT ASSETS:            
Vessels, net (including $138,600, and $3,406,400 related party commissions for the years ended 2020 and 2021, respectively)
  3, 6   58,045,628   393,965,929 
Advances for vessel acquisition
  6   0   2,368,165 
Restricted cash  7
   500,000   3,830,000 
Due from related party
  3   0   810,437 
Prepaid expenses and other assets, non-current      200,000   2,075,999 
Deferred charges, net  4   2,061,573   4,862,824 
Total non-current assets      60,807,201   407,913,354 
Total assets     $74,371,355  $462,913,442 
             
LIABILITIES AND SHAREHOLDERS’ EQUITY            
CURRENT LIABILITIES:            
Current portion of long-term debt, net  7
   2,102,037   16,091,723 
Current portion of long-term debt, related party  3, 7
   5,000,000   0 
Accounts payable      2,078,695   5,042,575 
Due to related parties, current  3   1,941   4,507,569 
Deferred revenue, net      108,125   3,927,833 
Accrued liabilities (including $405,000 and $0 accrued interest to related party, respectively)
  3   1,613,109   4,459,696 
Total current liabilities      10,903,907   34,029,396 
             
Commitments and contingencies  10
   0   0 
             
NON-CURRENT LIABILITIES:            
Long-term debt, net  7
   11,083,829   85,949,676 
Total non-current liabilities      11,083,829   85,949,676 
             
SHAREHOLDERS’ EQUITY:            
Common shares, $0.001 par value; 1,950,000,000 shares authorized; 13,121,238 shares issued and outstanding as of December 31, 2020 and 94,610,088 issued and outstanding as of December 31, 2021
  8
   13,121   94,610 
Preferred shares, $0.001 par value: 50,000,000 shares authorized:
  8
         
Series A Preferred Shares- 9.75% cumulative redeemable perpetual preferred shares, 480,000 shares issued and outstanding as of December 31, 2020 and 0 issued and outstanding as of December 31, 2021
  8
   480   0 
Series B Preferred Shares – 12,000 shares issued and outstanding as of December 31, 2020 and December 31, 2021, respectively
  8
   12   12 
Additional paid-in capital      53,686,741   303,658,153 
(Accumulated deficit)/ Retained earnings
      (1,316,735)  39,181,595 
Total shareholders’ equity      52,383,619   342,934,370 
Total liabilities and shareholders’ equity     $74,371,355  $462,913,442 

CASTOR MARITIME INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
For the year ended September 30, 2018, the Transition Period ended December 31, 2018 and the years ended December 31, 2019 and 2020
(Expressed in U.S. Dollars – except for share data)

  Number of shares issued             
  
Common shares
  
Preferred A shares
  
Preferred B shares
  
Par Value of
Shares issued
  
Additional
Paid-in capital
  
Retained earnings/
(Accumulated deficit)
  Total Shareholders' Equity 
Balance, September 30, 2017  2,400,000   480,000   12,000  $2,892  $7,612,108  $878,644  $8,493,644 
- Net income
  —   —   —   —   —   980,938   980,938 
Balance, September 30, 2018  2,400,000   480,000   12,000  $2,892  $7,612,108  $1,859,582  $9,474,582 
- Net income
  —   —   —   —   —   276,442   276,442 
Balance, December 31, 2018  2,400,000   480,000   12,000   2,892   7,612,108   2,136,024   9,751,024 
- Issuance of common stock, net of commissions and issuance costs, pursuant to the ATM Program (Note 7)
  618,112   —   —   618   2,319,083   —   2,319,701 
- Issuance of common stock related to Series A Preferred Stock dividends (Note 7)
  300,000   —   —   300   967,500   (967,800)  — 
- Series A Preferred Stock dividend waived accounted as deemed contribution (Note 7)
  —   —   —   —   3,379,589   —   3,379,589 
- Series A Preferred Stock dividend waived (Note 7)
  —   —   —   —   (1,560,014)  (1,819,575)  (3,379,589)
- Gain on extinguishment of preferred stock pursuant to the Series A Preferred Stock Amendment Agreement, net of expenses (Note 7)
  —   —   —   —   112,637   —   112,637 
- Preferred shareholders’ deemed dividend pursuant to the Series A Preferred Stock Amendment Agreement (Note 7)
  —   —   —   —   (130,000)  —   (130,000)
- Shareholder’s deemed contribution pursuant to the $7.5 Million Bridge Loan
  —   —   —   —   62,500   —   62,500 
- Net income
  —   —   —   —   —   1,088,149   1,088,149 
Balance, December 31, 2019  3,318,112   480,000   12,000   3,810   12,763,403   436,798   13,204,011 
-  Issuance of common stock pursuant to the $5.0 Million Convertible Debentures (Notes 6,7)
  8,042,078   —   —   8,042   5,049,731   —   5,057,773 
-  Issuance of common stock pursuant to the June Equity Offering, net of issuance costs (Note 7)  59,082,686   —   —   59,083   18,539,169   —   18,598,252 
-  Issuance of common stock pursuant to the July Equity Offering, net of issuance costs (Note 7)  57,750,000   —   —   57,750   15,630,104   —   15,687,854 
- Issuance of common stock pursuant to the exercise of Class A Warrants (Note 7)  3,019,500   —   —   3,019   1,053,806   —   1,056,825 
- Beneficial conversion feature pursuant to the issuance of the $5.0 Million Convertible Debentures (Note 6)  —   —   —   —   532,437   —   532,437 
Net loss  —   —   —   —   —   (1,753,533)  (1,753,533)
Balance, December 31, 2020  131,212,376   480,000   12,000   131,704   53,568,650   (1,316,735)  52,383,619 



The accompanying notes are an integral part of these consolidated financial statements.
F-5
F-3

CASTOR MARITIME INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the year ended September 30, 2018, the Transition Period ended December 31, 2018 and the years ended December 31, 2019 and 2020 (Expressed in U.S. Dollars)

  Note  
Year Ended
September 30,
  Three Months Ended December 31,  
Year Ended
December 31,
  
Year Ended
December 31,
 
     2018  2018  2019  2020 
Cash Flows provided by/(used in) Operating Activities:               
Net income/(loss)    $980,938  $276,442  $1,088,149  $(1,753,533)
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) Operating activities:                   
Depreciation and amortization of deferred dry-docking costs  4,5   637,611   177,378   897,171   1,904,963 
Amortization and write-off of deferred finance charges  14   —   —   6,628   599,087 
Amortization of other deferred charges      —   —   31,066   112,508 
Deferred revenue amortization      —   —   (119,006)  (430,994)
Convertible debentures’ interest settled in common stock  6,14   —   —   —   57,773 
Amortization and write-off of convertible notes beneficial conversion feature  6,14   —   —   —   532,437 
Provision for doubtful accounts  2   —   —   —   37,103 
Shareholders' deemed interest contribution      —   —   62,500   — 
Changes in operating assets and liabilities:                    
Accounts receivable trade      340,152   (668,520)  454,488   (1,122,836)
Inventories      (14,111)  3,167   (86,004)  (571,284)
Due from/to related parties      (166,815)  86,645   (582,952)  (797,805)
Prepaid expenses and other assets      (15,537)  (10,603)  (320,055)  (885,828)
Dry-dock costs paid      (784,474)  —   —   (1,308,419)
Other deferred charges      —   —   (198,364)  26,494 
Accounts payable      (71,621)  210,888   129,201   584,527 
Accrued liabilities      (3,437)  25,001   384,827   625,894 
Deferred revenue      —   47,708   564,313   46,104 
Net Cash provided by/(used in) Operating Activities      902,706   148,106   2,311,962   (2,343,809)
                     
Cash flow used in Investing Activities:                    
Vessel acquisitions and other vessel improvements  5   —   —   (17,227,436)  (35,472,173)
Net cash used in Investing Activities      —   —   (17,227,436)  (35,472,173)
                     
Cash flows provided by Financing Activities:                    
Gross proceeds from issuance of common stock and warrants  7   —   —   2,625,590   39,053,325 
Common stock issuance expenses paid      —   —   (305,889)  (3,710,394)
Proceeds from long-term debt and convertible debentures  6   —   —   11,000,000   9,500,000 
Repayment of long-term debt  6   —   —   —   (2,050,000)
Proceeds from related party debt  6   —   —   12,500,000   — 
Repayment of related party debt  6   —   —   (7,500,000)  — 
Payment of deferred financing costs      —   —   (232,568)  (608,985)
Net cash provided by Financing Activities      —   —   18,087,133   42,183,946 
                     
Net increase in cash, cash equivalents, and restricted cash      902,706   148,106   3,171,659   4,367,964 
Cash, cash equivalents and restricted cash at the beginning of the year/period      836,468   1,739,174   1,887,280   5,058,939 
Cash, cash equivalents and restricted cash at the end of the year/period     $1,739,174  $1,887,280  $5,058,939  $9,426,903 
                     
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH                    
Cash and cash equivalents     $1,739,174  $1,887,280  $4,558,939  $8,926,903 
Restricted cash      —   —   500,000   500,000 
Cash, cash equivalents, and restricted cash     $1,739,174  $1,887,280  $5,058,939   9,426,903 
                     
SUPPLEMENTAL CASH FLOW INFORMATION                    
Cash paid for interest      —   —   —   654,555 
Shares issued in connection with the settlement of the $5.0 Million Convertible Debentures      —   —   —   5,057,773 
Shares issued in connection with the Series A Preferred Shares Settlement Agreement      —   —   967,800   — 
Series A Preferred Stock dividend waived accounted as deemed contribution      —   —   3,379,589   — 
Preferred shareholders’ deemed contribution pursuant to the Series A Preferred Stock Amendment Agreement, net of expenses      —   —   112,637   — 
Shareholder’s deemed contribution pursuant to the $7.5 Million Bridge Loan      —   —   62,500   — 
Unpaid vessel acquisition and other vessel improvement costs (included in Accounts payable and Accrued liabilities)      —   —   33,344   657,204 
Unpaid deferred financing costs (included in Accounts payable)      —   —   17,000   — 
Unpaid deferred dry-dock costs (included in Accounts payable and Accrued liabilities)      —   —   —   907,685 

CASTOR MARITIME INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
For the year ended December 31, 2019, 2020 and 2021
(Expressed in U.S. Dollars – except for share data)
  Note  
Year Ended
December 31,
2019
  
Year Ended
December 31,
2020
  
Year Ended
December 31,
2021
 
REVENUES:            
Vessel revenues (net of commissions to charterers of  $302,556, $629,015 and $4,417,505 for the years ended December 31, 2019, 2020 and 2021, respectively)
  12  $5,967,772  $12,487,692  $132,049,710 
Total revenues      5,967,772   12,487,692   132,049,710 
                 
EXPENSES:                
Voyage expenses (including $40,471, $29,769 and $1,671,145 to related parties for the years ended December 31, 2019, 2020 and 2021, respectively)
  3,13   (261,179)  (584,705)  (12,950,783)
Vessel operating expenses  13   (2,802,991)  (7,447,439)  (39,203,471)
Management fees to related parties  3   (212,300)  (930,500)  (6,744,750)
Depreciation and amortization  4,6   (897,171)  (1,904,963)  (14,362,828)
Provision for doubtful accounts  2   0   (37,103)  (2,483)
General and administrative expenses  14             
- Company administration expenses (including $0, $400,000, and $1,200,000 to related party for the years ended December 31, 2019, 2020 and 2021)
      (378,777)  (1,130,953)  (3,266,310)
- Public registration costs      (132,091)  0   0 
Total expenses      (4,684,509)  (12,035,663)  (76,530,625)
                 
Operating income      1,283,263   452,029   55,519,085 
                 
OTHER INCOME/ (EXPENSES):                
Interest and finance costs (including $162,500, $305,000 and $204,167 to related party for the years ended December 31, 2019, 2020 and 2021, respectively)
  3,7,15   (222,163)  (2,189,577)  (2,854,998)
Interest income      31,589   34,976   75,123 
Foreign exchange (losses)/ gains      (4,540)  (29,321)  28,616 
Total other expenses, net      (195,114)  (2,183,922)  (2,751,259)
                 
Net income/(loss) and comprehensive income/(loss), before taxes     $1,088,149  $(1,731,893) $52,767,826 
US Source Income Taxes  16   0   (21,640)  (497,339)
Net income/(loss) and comprehensive income/(loss)     $1,088,149  $(1,753,533) $52,270,487 
                 
Cumulative dividends on Series A Preferred Shares
  11
   (372,022)  0   0 
Gain on extinguishment of Series A Preferred Shares  8,11
   112,637   0   0 
Deemed dividend on Series A preferred shares  8,11
   0   0   (11,772,157)
Net income/(loss) and comprehensive income/(loss) attributable to common shareholders      828,764   (1,753,533)  40,498,330 
                 
Earnings/(Loss) per common share, basic
  11   3.11   (0.26)  0.48 
Earnings/(Loss) per common share, diluted  11
  $3.11  $(0.26) $0.47 
Weighted average number of common shares, basic      266,238   6,773,519   83,923,435 
Weighted average number of common shares, diluted      266,238   6,773,519   85,332,728 
The accompanying notes are an integral part of these consolidated financial statements.
F-6
F-4

CASTOR MARITIME INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
For the year ended December 31, 2019, 2020 and 2021
(Expressed in U.S. Dollars – except for share data)
  Number of shares issued    
Par Value of
Shares issued
     Additional Paid-in capital     
Retained earnings/
(Accumulated deficit)
    Total Shareholders’ Equity  

 Common shares  Preferred A shares  Preferred B shares
Balance, December 31, 2018  240,000   480,000   12,000   732   7,614,268   2,136,024   9,751,024 
-  Issuance of common stock, net of commissions and issuance costs, pursuant to the First ATM Program (Note 8)
  61,811   0   0   62   2,319,639   0   2,319,701 
-  Issuance of common stock related to Series A Preferred Stock dividends (Note 8)
  30,000   0   0   30   967,770   (967,800)  0 
-  Series A Preferred Stock dividend waived accounted as deemed contribution (Note 8)
  —   —   —   0   3,379,589   0   3,379,589 
-  Series A Preferred Stock dividend waived (Note 8)
  —   —   —   0   (1,560,014)  (1,819,575)  (3,379,589)
-  Gain on extinguishment of preferred stock pursuant to the Series A Preferred Stock Amendment Agreement, net of expenses (Note 8)
  —   —   —   0   112,637   0   112,637 
-  Preferred shareholders’ deemed dividend pursuant to the Series A Preferred Stock Amendment Agreement (Note 8)
  —   —   —   0   (130,000)  0   (130,000)
-  Shareholder’s deemed contribution pursuant to the $7.5 Million Bridge Loan
  —   —   —   0   62,500   0   62,500 
- Net income  —   —   —   0   0   1,088,149   1,088,149 
Balance, December 31, 2019
  331,811   480,000   12,000   824   12,766,389   436,798   13,204,011 
-  Issuance of common stock pursuant to the $5.0 Million Convertible Debentures (Note 7)
  804,208   0   0   804   5,056,969   0   5,057,773 
-  Issuance of common stock pursuant to the 2020 June Equity Offering, net of issuance costs (Note 8)
  5,908,269   0   0   5,908   18,592,344   0   18,598,252 
-  Issuance of common stock pursuant to the 2020 July Equity Offering, net of issuance costs (Note 8)
  5,775,000   0   0   5,775   15,682,079   0   15,687,854 
-  Issuance of common stock pursuant to the exercise of Class A Warrants (Note 8)
  301,950   0   0   302   1,056,523   0   1,056,825 
- Beneficial conversion feature pursuant to the issuance of the $5.0 Million Convertible Debentures (Note 7)
  —   —   —   0   532,437   0   532,437 
-Net loss  —   —   —   0   0   (1,753,533)  (1,753,533)
Balance, December 31, 2020
  13,121,238   480,000   12,000   13,613   53,686,741   (1,316,735)  52,383,619 
-  Issuance of common stock pursuant to the registered direct offerings (Note 8)  42,405,770   0   0   42,406   156,824,134   0   156,866,540 
-  Issuance of common stock pursuant to warrant exercises (Note 8)  34,428,840   0   0   34,429   83,386,517   0   83,420,946 
-  Issuance of common stock pursuant to the Second ATM Program (Note 8)  4,654,240   0   0   4,654   12,388,124   0   12,392,778 
-  Redemption of Series A Preferred Shares (Note 8)      (480,000)      (480)  (2,627,363)  (11,772,157)  (14,400,000)
-Net income  —   —   —   0   0   52,270,487   52,270,487 
Balance, December 31, 2021
  94,610,088   0   12,000   94,622   303,658,153   39,181,595   342,934,370 
The accompanying notes are an integral part of these consolidated financial statements.
F-5
CASTOR MARITIME INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars – except for share data unless otherwise stated)

CASTOR MARITIME INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the year ended December 31, 2019, 2020 and 2021 (Expressed in U.S. Dollars)
  Note  Year Ended December 31, 
     2019  
2020
  
2021
 
Cash Flows provided by/(used in) Operating Activities:            
Net income/(loss)    $1,088,149  $(1,753,533) $52,270,487 
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) Operating activities:               
Depreciation and amortization  4,6   897,171   1,904,963   14,362,828 
Amortization and write-off of deferred finance charges  15   6,628   599,087   414,629 
Amortization of other deferred charges      31,066   112,508   0 
Deferred revenue amortization      (119,006)  (430,994)  0 
Amortization of fair value of acquired charter  5
   0   0   (1,940,000)
Interest settled in common stock  7,15   0   57,773   0 
Amortization and write-off of convertible notes beneficial conversion feature  7,15   0   532,437   0 
Provision for doubtful accounts  2   0   37,103   2,483 
Shareholders’ deemed interest contribution      62,500   0   0 
Changes in operating assets and liabilities:                
Accounts receivable trade, net
      454,488   (1,122,836)  (6,924,622)
Inventories      (86,004)  (571,284)  (3,722,061)
Due from/to related parties      (582,952)  (797,805)  5,254,323 
Prepaid expenses and other assets      (320,055)  (885,828)  (3,406,066)
Dry-dock costs paid      0   (1,308,419)  (3,730,467)
Other deferred charges      (198,364)  26,494   (191,234)
Accounts payable      129,201   584,527   3,070,287 
Accrued liabilities      384,827   625,894   1,495,032 
Deferred revenue      564,313   46,104   3,819,708 
Net Cash provided by/(used in) Operating Activities      2,311,962   (2,343,809)  60,775,327 
                 
Cash flow used in Investing Activities:                
Vessel acquisitions (including time charter attached) and other vessel improvements  6   (17,227,436)  (35,472,173)  (346,273,252)
Advances for vessel acquisition
  6
   0   0   (2,367,455)
Net cash used in Investing Activities      (17,227,436)  (35,472,173)  (348,640,707)
                 
Cash flows provided by Financing Activities:                
Gross proceeds from issuance of common stock and warrants  8   2,625,590   39,053,325   265,307,807 
Common stock issuance expenses
      (305,889)  (3,710,394)  (12,527,747)
Proceeds from long-term debt and convertible debentures  7   11,000,000   9,500,000   97,190,000 
Redemption of Series A Preferred Shares
  8
   0   0   (14,400,000)
Repayment of long-term debt  7   0   (2,050,000)  (6,878,500)
Proceeds from related party debt      12,500,000   0   0 
Repayment of related party debt  3
   (7,500,000)  0   (5,000,000)
Payment of deferred financing costs      (232,568)  (608,985)  (1,866,615)
Net cash provided by Financing Activities      18,087,133   42,183,946   321,824,945 
                 
Net increase in cash, cash equivalents, and restricted cash      3,171,659   4,367,964   33,959,565 
Cash, cash equivalents and restricted cash at the beginning of the period      1,887,280   5,058,939   9,426,903 
Cash, cash equivalents and restricted cash at the end of the period     $5,058,939  $9,426,903  $43,386,468 
                 
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH                
Cash and cash equivalents     $4,558,939  $8,926,903  $37,173,736 
Restricted cash, current
      0   0   2,382,732 
Restricted cash, non-current
      500,000   500,000   3,830,000 
Cash, cash equivalents, and restricted cash     $5,058,939  $9,426,903  $43,386,468 
                 
SUPPLEMENTAL CASH FLOW INFORMATION                
Cash paid for interest      0   654,555   2,271,525 
Shares issued in connection with the settlement of the $5.0 Million Convertible Debentures
      0   5,057,773   0 
Shares issued in connection with the Series A Preferred Shares Settlement Agreement      967,800   0   0 
Series A Preferred Stock dividend waived accounted as deemed contribution      3,379,589   0   0 
Preferred shareholders’ deemed contribution pursuant to the Series A Preferred Stock Amendment Agreement, net of expenses      112,637   0   0 
Shareholder’s deemed contribution pursuant to the $7.5 Million Bridge Loan
      62,500   0   0 
Unpaid capital raising costs (included in Accounts payable and Accrued Liabilities)
      0   0   99,797 
Unpaid vessel acquisition and other vessel improvement costs (included in Accounts payable and Accrued liabilities)      33,344   657,204   1,592,001 
Unpaid advances for vessel acquisitions (included in Accounts payable and Accrued Liabilities)      0   0   710 
Unpaid deferred dry-dock costs (included in Accounts payable and Accrued liabilities)      0   907,685   1,113,547 
Unpaid deferred financing costs      17,000   0   3,980 
The accompanying notes are an integral part of these consolidated financial statements.

F-6
CASTOR MARITIME INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars – except for share data unless otherwise stated)

1.Basis of Presentation and General information

Castor Maritime Inc. (“Castor”) was incorporated in September 2017 under the laws of the Republic of the Marshall Islands. The accompanying consolidated financial statements include the accounts of Castor and its wholly-owned subsidiaries (collectively, the “Company”).
The Company is engaged in the worldwide transportation of ocean-going cargoes through its vessel-owning subsidiaries. On December 21, 2018, Castor’s common shares began trading on the Norwegian OTC  under the symbol “CASTOR” and, on February 11, 2019, they began trading on the Nasdaq Capital Market, or Nasdaq, under the symbol “CTRM”.
As of December 31, 2020,2021, Castor was controlled by Thalassa Investment Co. S.A. (“Thalassa”) by virtue of the 100% Series B preferred shares owned by it and, as a result, Thalassa could control the outcome of matters on which shareholders are entitled to vote. Thalassa is controlled by Petros Panagiotidis, the Company'sCompany’s Chairman, Chief Executive Officer and Chief Financial Officer.
Pavimar S.A., a corporation incorporated under the laws of the Republic of the Marshall Islands (“Pavimar”), a related party controlled by the sister of Petros Panagiotidis, Ismini Panagiotidis,, provides technical, crew and operational management services to the Company.
Castor Ships S.A., a corporation incorporated under the laws of the Republic of the Marshall Islands (“Castor Ships”), a related party controlled by the Company’s Chairman, Chief Executive Officer and Chief Financial Officer, Petros Panagiotidis, manages overall the Company’s business and provides commercial ship management, chartering and administrative services to the Company.
As of December 31, 2020,2021, the Company was the sole ownerowned a diversified fleet of all outstanding shares28 vessels, with a combined carrying capacity of 2.4 million dwt, consisting of 1 Capesize, 7 Kamsarmax and 11 Panamax dry bulk vessels, as well as 1 Aframax, 6 Aframax/LR2 and 2 Handysize tankers. Details of the followingCompany’s vessel owning subsidiary companies:
Vessel owning subsidiaries consolidated owning dry-bulk Panamax vessels
CompanyCountry of incorporationVessel NameDWTYear BuiltDelivery date to Castor
Spetses Shipping Co. (“Spetses”)Marshall IslandsMagic P76,4532004February 2017
Bistro Maritime Co. (“Bistro”)Marshall IslandsMagic Sun75,3112001September 2019
Pikachu Shipping Co. (“Pikachu”)Marshall IslandsMagic Moon76,6022005October 2019
Bagheera Shipping Co. (“Bagheera”)Marshall IslandsMagic Rainbow73,5932007August 2020
Pocahontas Shipping Co. (“Pocahontas”)Marshall IslandsMagic Horizon76,6192010October 2020
Jumaru Shipping Co. (“Jumaru”)Marshall IslandsMagic Nova78,8332010October 2020
Changecompanies as of fiscal year
On September 27, 2019, the Company’s Board of Directors authorized a change in Castor’s fiscal year end from September 30 to December 31. This change in the Company’s fiscal year end resulted in a three-month transition period from October 1, 2018 to December 31, 2018 (the “Transition Period”). On December 16, 2019, the Company filed an audited transition report on Form 20-F with the U.S. Securities and Exchange Commission for the Transition Period.2021, are listed below.
Consolidated vessel owning subsidiaries:
 CompanyCountry of
incorporation		Vessel NameDWTYear Built
Delivery date
to Castor
1Spetses Shipping Co. (“Spetses”)Marshall IslandsM/V Magic P76,4532004February 2017
2Bistro Maritime Co. (“Bistro”)Marshall IslandsM/V Magic Sun75,3112001September 2019
3
Pikachu Shipping Co. (“Pikachu”)Marshall IslandsM/V Magic Moon76,6022005October 2019
4Bagheera Shipping Co. (“Bagheera”)Marshall IslandsM/V Magic Rainbow73,5932007August 2020
5
Pocahontas Shipping Co. (“Pocahontas”)Marshall IslandsM/V Magic Horizon76,6192010October 2020
6
Jumaru Shipping Co. (“Jumaru”)Marshall IslandsM/V Magic Nova78,8332010October 2020
7
Super Mario Shipping Co. (“Super Mario”)Marshall IslandsM/V Magic Venus83,4162010March 2021
8
Pumba Shipping Co. (“Pumba”)Marshall IslandsM/V Magic Orion180,2002006March 2021
9
Kabamaru Shipping Co. (“Kabamaru”)Marshall IslandsM/V Magic Argo82,3382009March 2021
10
Luffy Shipping Co. (“Luffy”)Marshall IslandsM/V Magic Twilight80,2832010April 2021
11
Liono Shipping Co. (“Liono”)Marshall IslandsM/V Magic Thunder83,3752011April 2021
12
Stewie Shipping Co. (“Stewie”)Marshall IslandsM/V Magic Vela75,0032011May 2021
13
Snoopy Shipping Co. (“Snoopy”)Marshall IslandsM/V Magic Nebula80,2812010May 2021
14
Mulan Shipping Co. (“Mulan”)Marshall IslandsM/V Magic Starlight81,0482015May 2021
15
Cinderella Shipping Co. (“Cinderella”)Marshall IslandsM/V Magic Eclipse74,9402011June 2021
16
Rocket Shipping Co. (“Rocket”)Marshall IslandsM/T Wonder Polaris115,3512005March 2021
17
Gamora Shipping Co. (“Gamora”)Marshall IslandsM/T Wonder Sirius115,3412005March 2021
18
Starlord Shipping Co. (“Starlord”)Marshall IslandsM/T Wonder Vega106,0622005May 2021
19
Hawkeye Shipping Co. (“Hawkeye”)Marshall IslandsM/T Wonder Avior106,1622004May 2021
20
Elektra Shipping Co. (“Elektra”)Marshall IslandsM/T Wonder Arcturus106,1492002May 2021
21
Vision Shipping Co. (“Vision”)Marshall IslandsM/T Wonder Mimosa36,7182006May 2021
22
Colossus Shipping Co. (“Colossus”)Marshall IslandsM/T Wonder Musica106,2902004June 2021
 
F-7

CASTOR MARITIME INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars – except for share data unless otherwise stated)

1.Basis of Presentation and General information (continued):


23
Xavier Shipping Co. (“Xavier”)Marshall IslandsM/T Wonder Formosa36,6602006June 2021
24
Songoku Shipping Co. (“Songoku”)Marshall IslandsM/V Magic Pluto74,9402013August 2021
25
Asterix Shipping Co. (“Asterix”)Marshall IslandsM/V Magic Perseus82,1582013August 2021
26
Johnny Bravo Shipping Co. (“Johnny Bravo”)Marshall IslandsM/V Magic Mars76,8222014September 2021
27
Garfield Shipping Co. (“Garfield”)Marshall IslandsM/V Magic Phoenix76,6362008October 2021
28
Drax Shipping Co. (“Drax”)Marshall IslandsM/T Wonder Bellatrix115,3412006December 2021

Consolidated subsidiaries formed to acquire vessels:

1Mickey Shipping Co. (“Mickey”) incorporated under the laws of the Marshall Islands

Consolidated non-vessel owning subsidiaries:

1
Castor Maritime SCR Corp. (1)

(1)
Incorporated under the laws of the Marshall Islands, this entity serves as the Company’s vessel owning subsidiaries’ cash manager with effect from November 1, 2021.

Credit concentration:
During the year ended September 30, 2018, the Transition Period ended December 31, 2018 and the years ended December 31, 2019, 2020 and 2020,2021, charterers that individually accounted for more than 10% of the Company’s revenues (as percentages of total revenues), all derived from the Company’s dry bulk segment, were as follows:

Charterer 
Year Ended
December 31, 2019
  
Year Ended
December 31, 2020
  
Year Ended
December 31, 2021
 
A  63%  34%  20%
B  0%  0%  12%
C  0%  0%  11%
D  13%  0%  0%
E
  12%  24%  0%
F
  12%  0%  0%
Total  100%  58%  43%
Charterer  Year Ended September 30, 2018  Three Months Ended December 31, 2018  Year Ended December 31, 2019  Year Ended December 31, 2020 
A   24%  100%  63%  34%
B   52%  —%  —%  —%
C   17%  —%  —%  —%
D   —%  —%  13%  —%
E
 
  —%  —%  12%  24%
F
 
  —%  —%  12%  —%
Total   93%  100%  100%  58%

COVID-19 related considerations
The COVID-19 ongoing pandemic has negatively impacted, and may continue to impact negatively, global economic activity and demand, including the shipping industry into which the Company operates. In case that the ongoing COVID-19 pandemic continues to negatively impact market rates in the long-term, depending on the pervasiveness of such economic recession, there could be a significant negative impact in the Company’s liquidity, vessels’ value and overall financial condition. The COVID-19 pandemic has had a negative impact on certain of the Company’s vessels’ charter rates and, therefore, on the Company’s voyage revenues for the year ended December 31, 2020. Additionally, during 2020, the Company has experienced disruptions and in certain cases, prolonged delays, to the majority of its vessels’ normal operations caused by deviation time associated with quarantine checks, crew changes and positioning its vessels to countries in which it can rotate crew in compliance with such measures. These overall difficulties have caused the Company’s operating costs and, more specifically, crew costs, to increase during the year ended December 31, 2020 while also having elevating its fleet off-hire days.
The Company evaluates on a quarterly basis its ability to continue as a going concern in accordance the provisions of ASU No. 2014-15 for a period of one year after the date that the financial statements are issued. In light of the continuity of the COVID-19 pandemic and the overall uncertainty on its potential future impact, the Company, as at December 31, 2020, performed a sensitivity analysis on key assumptions such as the estimates of future charter rates for non-contracted revenue days in order to identify conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date the financial statements are issued. As per the Company’s evaluation, it was concluded that COVID-19 related considerations did not adversely affect the Company’s ability to continue as a going concern.
2.Significant Accounting Policies and Recent Accounting Pronouncements:
Principles of consolidation
The accompanying consolidated financial statements have been prepared in accordance with Generally Accepted Accounting Principles in the United States of America (“U.S. GAAP”). The consolidated financial statements include the accounts of Castor and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. Castor, as the holding company, determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity. Under Financial Accounting
F-8

CASTOR MARITIME INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars – except for share data unless otherwise stated)

2.Significant Accounting Policies and Recent Accounting Pronouncements (continued):
Standards Board (“FASB”) Accounting Standard Codification (“ASC”) 810 “Consolidation”, a voting interest entity is an entity in which the total equity investment at risk is deemed sufficient to absorb the expected losses of the entity, the equity holders have all the characteristics of a controlling financial interest and the legal entity is structured with substantive voting rights. The holding company consolidates voting interest entities in which it owns all, or at least a majority (generally, greater than 50%) of the voting interest. Variable interest entities (“VIE”) are entities, as defined under ASC 810, that in general either have equity investors with non-substantive voting rights or that have equity investors that do not provide sufficient financial resources for the entity to support its activities. The holding company has a controlling financial interest in a VIE and is, therefore, the primary beneficiary of a VIE if it has the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. A VIE should have only one primary beneficiary which is required to consolidate the VIE. A VIE may not have a primary beneficiary if no party meets the criteria described above. The Company evaluates all arrangements that may include a variable interest in an entity to determine if it is the primary beneficiary, and would therefore be required to include assets, liabilities and operations of a VIE in its consolidated financial statements.
 
F-8
2.Significant Accounting Policies and Recent Accounting Pronouncements (continued):

Use of estimates
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include vessel valuations, the valuation of amounts due from charterers, residual value and the useful life of the vessels. Actual results may differ from these estimates.

Segment Reporting 



The Company reports financial information and evaluates its operations by charter revenues and by type of vessel. As a result, management, including the chief operating decision maker, reviews operating results by revenue per day and by the segmented operating results of its fleet. In the fourth quarter of 2021, the Company determined that it operated under 3 reportable segments, as a provider of dry bulk commodities transportation services (dry bulk segment) and as a provider of transportation services for crude oil (Aframax/LR2 tanker segment) and oil products (Handysize tanker segment). The accounting policies applied to the reportable segments are the same as those used in the preparation of the Company’s consolidated financial statements. When the Company charters a vessel to a charterer, the charterer is free to trade the vessel worldwide and, as a result, the disclosure of geographic information is impracticable.


Other comprehensive income
The Company follows the accounting guidance relating to comprehensive income, which requires separate presentation of certain transactions that are recorded directly as components of shareholders'shareholders’ equity. The Company has no other comprehensive income/ (loss) items and, accordingly, comprehensive income equals net income for the periods presented.
Foreign currency translation
The Company'sCompany’s reporting and functional currency is the U.S. Dollar (“USD”). Transactions incurred in other currencies are translated into USD using the exchange rates in effect at the time of the transactions. At the balance sheet date, monetary assets and liabilities that are denominated in other currencies are translated into USD to reflect the end-of-period exchange rates and any gains or losses are included in the consolidated statements of comprehensive income.
Cash and cash equivalents
The Company considers highly liquid investments such as time deposits and certificates of deposit with an original maturity of three months or less to be cash equivalents.
Restricted Cash
Restricted cash may comprise of (i) minimum liquidity collateral requirements or minimum required cash deposits that are required to be maintained under the Company’s financing arrangements, (ii) cash deposits in so-called “retention accounts” which may only be used as per the Company’s borrowing arrangements for the purpose of serving the loan installments coming due or, (iii) other cash deposits required to be retained until other specified conditions prescribed in the Company’s debt agreements are met. In the event that the obligation to maintain such deposits is expected to elapse within the next operating cycle, these deposits are classified as current assets. Otherwise, they are classified as non-current assets.

F-9

CASTOR MARITIME INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars – except for share data unless otherwise stated)
2.Significant Accounting Policies and Recent Accounting Pronouncements (continued):

Accounts receivable trade, net
The amount shown as trade receivables, net, at each balance sheet date, includes receivables from charterers for hire, freight, pool revenue, and other potential sources of income (such as ballast bonus compensation and/or holds cleaning compensation)compensation, etc.) under the Company’s charter contracts and/or pool arrangements, net of any provision for doubtful accounts. At each balance sheet date, all potentially uncollectible accounts are assessed individually for purposes of determining the appropriate provision for doubtful accounts. Provision for doubtful accounts recorded as of December 31, 2019, 2020 and 20202021 amounted to $0, $37,103 and $37,103,$2,483, respectively.
Inventories
Inventories consist of bunkers, lubricants and provisions on board each vessel. Inventories are stated at the lower of cost or net realizable value. Net realizable value is the estimated selling price less reasonably predictable costs of disposal and transportation. Cost is determined by the first in, first out method. Inventories may also consist of bunkers during periods when vessels are unemployed, undergoing dry-docking or special survey or under voyage charters, in which case, they are also stated at the lower of cost or net realizable value and cost is also determined by the first in, first out method.

Intangible Assets/Liabilities Related to Time Charters Acquired



When and where the Company identifies any assets or liabilities associated with the acquisition of a vessel, the Company records all such identified assets or liabilities at fair value. Fair value is determined by reference to market data obtained by independent broker’s valuations. The valuations reflect the fair value of the vessel with and without the attached time charter and the cost of the acquisition is then allocated to the vessel and the intangible asset or liability on the basis of their relative fair values. The intangible asset or liability is amortized as an adjustment to revenues over the assumed remaining term of the acquired time charter and is classified as non-current asset or liability, as applicable, in the accompanying consolidated balance sheets.


Insurance Claims
The Company records insurance claim recoveries for insured losses incurred on damage to fixed assets, loss of hire and for insured crew medical expenses. Insurance claim recoveries are recorded, net of any deductible amounts, at the time when (i) the Company’s vessels suffer insured damages or at the time when crew medical expenses are incurred, (ii) recovery is probable under the related insurance policies, (iii) the Company can estimate the amount of such recovery following submission of the insurance claim and (iv) provided that the claim is not subject to litigation.
Vessels, net
Vessels, net are stated at cost net of accumulated depreciation. The cost of a vessel consists of the contract price plus any direct expenses incurred upon acquisition, including improvements, delivery expenses and other expenditures to prepare the vessel for its intended use which is to provide worldwide integrated transportation services. Subsequent expenditures for conversions and major improvements are also capitalized when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of a vessel; otherwise these amounts are charged to expense as incurred.
Vessels’ 
Vessels’ depreciation
Depreciation is computed using the straight line method over the estimated useful life of a vessel, after considering the estimated salvage value. Each vessel'svessel’s salvage value is equal to the product of its lightweight tonnage and estimated scrap rate. Salvage values are periodically reviewed and revised, if needed, to recognize changes in conditions, new regulations or for other reasons. Revisions of salvage value affect the depreciable amount of the vessels and affect depreciation expense in the period of the revision and future periods. Management estimates the useful life of its vessels to be 25 years from the date of their initial delivery from the shipyard.

F-10
2.Significant Accounting Policies and Recent Accounting Pronouncements (continued):

Impairment of long‑ long‑ lived assets
The Company reviews its vessels for impairment whenever events or changes in circumstances indicate that the carrying amount of a vessel may not be recoverable. When the estimate of future undiscounted cash flows expected to be generated by the use of a vessel is less than its carrying amount, the Company evaluates the vessel for an impairment loss. Measurement of the impairment loss is based on the fair value of the vessel in comparison to its carrying value.value, including any related intangible assets and liabilities. In this respect, management regularly reviews the carrying amount of its vessels’vessels in connection with their estimated recoverable amount.
F-10

CASTOR MARITIME INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars – except for share data unless otherwise stated)
2.Significant Accounting Policies and Recent Accounting Pronouncements (continued):
Dry-docking and special survey costs
Dry-docking and special survey costs are accounted under the deferral method whereby the actual costs incurred are deferred and are amortized on a straight-line basis over the period through the date the next survey is scheduled to become due. Costs deferred are limited to actual costs incurred at the yard and parts used in the dry-docking or special survey. Costs deferred include expenditures incurred relating to shipyard costs, hull preparation and painting, inspection of hull structure and mechanical components, steelworks, machinery works, and electrical works as well as lodging and subsistence of personnel sent to the yard site to supervise. If a dry-dock and/or a special survey is performed prior to its scheduled date, the remaining unamortized balance is immediately expensed. Unamortized balances of vessels that are sold are written-off and included in the calculation of the resulting gain or loss in the period of a vessel’s sale. The amortization charge related to dry-docking costs and special survey costs is presented within Depreciation and amortization in the accompanying consolidated statements of comprehensive income.
Revenue and expenses recognition (including Leases)



The Company currently generates and has historically generated its revenues only underfrom time charter contracts. Acontracts, voyage charter contracts and pool arrangements. Under a time charter isagreement, a type of contract that is entered into for the use of sucha vessel as well as such vessel’s operations for a specific period of time and a specified daily fixed or index-linked charter hire rate. An index-linked rate usually refers to freight rate indices issued by the Baltic Exchange, such as the Baltic Panamax Index. Under a voyage charter agreement, a contract is made for the use of a vessel for a specific voyage to transport a specified agreed upon cargo at a specified dailyfreight rate per ton or occasionally a lump sum amount. A less significant part of the Company’s revenues is also generated from pool arrangements, determined in accordance with the profit-sharing mechanism specified within each pool agreement.


Revenues related to time charter hire rate.contracts
Lease Contracts


The Company accounts for its time charter contracts as operating leases pursuant to ASC 842 “Leases” which was early adopted by the Company on October 1, 2018.. The Company has determined that the non-lease component in its time charter contracts relates to services for the operation of the vessel, which comprise of crew, technical and safety services, among others. The Company further elected to adopt the above discussed optionala practical expedient andthat provides it with the discretion to recognize lease revenue as a combined single lease component for all time charter contracts (operating leases) since it made a determinationdetermined that the related lease component and non-lease component have the same timing and pattern of transfer and the predominant component is the lease. The Company qualitatively assessed that more value is ascribed to the use of the asset (i.e(i.e., the vessel) rather than to the services provided under the time charter agreements.
 

Lease revenues are recognized on a straight linestraight-line basis over the non-cancellable rental periods of such charter agreements, as rental service is provided, beginning when a vessel is delivered to the charterer until it is redelivered back to the Company, and is recorded as part of vessel revenues in the Company’s consolidated statements of comprehensive income/(loss). Revenue Revenues generated from variable lease payments isare recognized in the period when changes in facts and circumstances on which the variable lease payments are based occur. Deferred revenue includes (i) cash received prior to the balance sheet date for which all criteria to recognize as lease revenue have not yet been met as at the balance sheet date and, accordingly, is related to revenue earned after such date and (ii) deferred contract revenue such as deferred ballast compensation earned as part of a lease contract. Lease revenue is shown net of commissions payable directly to charterers under the relevant time charter agreements. Charterers’ commissions represent discount (sales incentive) on services rendered by the Company and no identifiable benefit is received in exchange for the consideration provided to the charterer. Apart from the agreed hire rate, the owner may be entitled to additional income, such as ballast bonus, which is considered as reimbursement of owner’s expenses and is recognized together with the lease component over the duration of the charter. The Company made an accounting policy election to recognize the related ballast costs, which mainly consist of bunkers, incurred over the period between the charter party date or the prior redelivery date (whichever is latest) and the delivery date to the charterer, as contract fulfillment costs in accordance with ASC 340-40 and amortize these over the period of the charter.
As of December 31, 2019, deferred ballast costs and related deferred ballast income related to lease contracts amounted to $112,508 and $430,994, respectively, and are presented under Deferred charges, net (Current) and Deferred revenue, net (Current) respectively, in the accompanying consolidated balance sheet. Deferred ballast costs and related deferred ballast income were zero as of December 31, 2020. Amortization expenses related to deferred ballast costs for the years ended

F-11

CASTOR MARITIME INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars – except for share data unless otherwise stated)


2.Significant Accounting Policies and Recent Accounting Pronouncements (continued):
December 31, 2019


Revenues related to voyage charter contracts



The Company accounts for its voyage charter contracts following the provisions of ASC 606, Revenue from contracts with customers. The Company has determined that its voyage charter agreements do not contain a lease because the charterer under such contracts does not have the right to control the use of the vessel since the Company retains control over the operations of the vessel, provided also that the terms of the voyage charter are predetermined, and 2020 amountedany change requires the Company’s consent and are therefore considered service contracts.

The Company assessed the provisions of ASC 606 and concluded that there is 1 single performance obligation when accounting for its voyage charters, which is to $31,066provide the charterer with an integrated cargo transportation service within a specified period of time. In addition, the Company has concluded that voyage charter contracts meet the criteria to recognize revenue over time as the charterer simultaneously receives and $112,508, respectively, andconsumes the benefits of the Company’s performance. As a result of the foregoing, voyage revenue derived from voyage charter contracts is recognized from the time when a vessel arrives at the load port until completion of cargo discharge. Demurrage income, which is considered a form of variable consideration, is included under Voyage expensesin voyage revenues, and represents payments by the charterer to the vessel owner when loading or discharging time exceeds the stipulated time in the accompanying consolidated statementsvoyage charter agreements.

Under a voyage charter agreement, the Company incurs and pays for certain voyage expenses, primarily consisting of comprehensive income. Amortizationbunkers consumption, brokerage commissions, port and canal costs.

Revenues related to pool contracts



As from the second quarter of deferred ballast income2021, the Company began operation for certain of its tanker vessels in pools. Pool revenue for each vessel is determined in accordance with the profit-sharing mechanism specified within each pool agreement. In particular, the Company’pool managers aggregate the revenues and expenses of all of the pool participants and distribute the net earnings to participants, as applicable:



• based on the pool points attributed to each vessel (which are determined by vessel attributes such as cargo carrying capacity, speed, fuel consumption, and construction and other characteristics); or



• by making adjustments to account for the years ended December 31, 2019cost performance, the bunkering fees and 2020 amounted to $119,006the trading capabilities of each vessel; and $430,994, respectively, and is included under Vessel revenues



• the number of days the vessel participated in the accompanying consolidated statementpool in the period (excluding off-hire days).

 

The Company records revenue generated from the pools in accordance with ASC 842, Leases, since it assesses that a vessel pool arrangement is a variable time charter with the variable lease payments recorded as income in profit or loss in the period in which the changes in facts and circumstances on which the variable lease payments are based occur.

F-12
2.Significant Accounting Policies and Recent Accounting Pronouncements (continued):

Voyage Expenses
Voyage expenses, consist of:(a) port, canal and bunker expenses that are unique to a particular charter are paid for bythat the charterer under time charter arrangements or by the Company incurs primarily when its vessels operate under voyage charter arrangements or during repositioning periods, and (b) brokerage commissions, which are always paid for by the Company, regardless of charter type.commissions. All voyage expenses are expensed as incurred, except for brokerage commissions. Commissions paidcontract fulfilment costs which are capitalized to brokersthe extent the Company, in its reasonable judgement, determines that they (i) are directly related to a contract, (ii) will be recoverable and (iii) enhance the Company’s resources by putting the Company’s vessel in a location to satisfy its performance obligation under a contract pursuant to the provisions of ASC 340-40 “Other assets and deferred costs”. These capitalized contract costs are amortized on a straight-line basis as the related performance obligations are satisfied. Costs to fulfill the contract prior to arriving at the load port primarily consist of bunkers which are deferred and amortized overduring the related charter period tovoyage period. These capitalized contract fulfilment costs are recorded under “Deferred charges, net” in the extent revenue has been deferred since commissions are earned as the Company's revenues are earned.accompanying consolidated balance sheets. At the inception of a time charter, the Company records the difference between the cost of bunker fuel delivered by the terminating charterer and the bunker fuel sold to the new charterer as a bunker gain or loss within voyage expenses.
Accounting for Financial Instruments
The principal financial assets of the Company consist of cash and cash equivalents, restricted cash, amounts due from related parties and trade receivables, net. The principal financial liabilities of the Company consist of trade and other payables, accrued liabilities, long-term debt and amounts due to related parties. The Company is exposed to changes in the spot market rates associated with the deployment of its vessels and its objective is to manage the impact of such changes in its cash flows. In this respect, from time to time, the Company may engage in certain forward freight agreements. The Company may also enter into interest rate derivatives to economically hedge its exposure to interest rate fluctuations of its debt obligations as well as derivatives relating to the fluctuation of the price of bunker fuel consumed by its vessels.
When such derivatives do not qualify for hedge accounting the Company records these financial instruments in the consolidated balance sheet at their fair value as either a derivative asset or a liability, and recognizes the fair value changes thereto in earnings. When the derivatives do qualify for hedge accounting, depending upon the nature of the hedge, changes in fair value of the derivatives are either offset against the fair value of assets and liabilities through earnings, or recognized in other comprehensive income/(loss) (effective portion) until the hedged item is recognized in earnings. As of December 31, 2019 and 2020, there were no open derivative instruments.
Convertible debt and associated beneficial conversion features (BCFs)
Convertible debt is accounted for in accordance with ASC 470-20, Debt with Conversion and Other Options. An instrument that is not a derivative itself must be evaluated for embedded features that should be bifurcated and separately accounted for as freestanding derivatives in accordance with ASC 815, Derivatives and Hedging, or separately accounted for under the cash conversion literature of ASC 470-20, Debt with Conversion and Other Options.

The BCF is recognized separately at issuance by allocating a portion of the proceeds equal to the intrinsic value of the BCF to additional paid-in capital, resulting in a discount on the convertible instrument. This discount is accreted from the date on which the BCF is first recognized through the stated maturity date of the convertible instrument using the effective interest method. Upon conversion of an instrument with a BCF, all unamortized discounts at the conversion date are recognized immediately as interest expense.
F-12

CASTOR MARITIME INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars – except for share data unless otherwise stated)

2.Significant Accounting Policies and Recent Accounting Pronouncements (continued):
Fair value measurements
The Company follows the provisions of ASC 820, “Fair Value Measurements and Disclosures” which defines, and provides guidance as to the measurement of fair value. ASC 820 creates a hierarchy of measurement and indicates that, when possible, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The fair value hierarchy gives the highest priority (Level 1) to quoted prices in active markets and the lowest priority (Level 3) to unobservable data, for example, the reporting entity’s own data. Under the standard, fair value measurements are separately disclosed by level within the fair value hierarchy.
Repairs and Maintenance
All repair and maintenance expenses including underwater inspection expenses are expensed in the period incurred. Such costs are included in Vessel operating expenses in the accompanying consolidated statements of comprehensive income.income/(loss).
Financing
 
Financing Costs
In accordance with ASU 2015-03, “Interest – Imputation of Interest”, costs
Costs associated with long-term debt, including but not limited to, fees paid to lenders, fees required to be paid to third parties on the lender’s behalf in connection with debt financing or refinancing, or any unamortized portion thereof, are presented by the Company as a reduction of long-term debt. Such fees are deferred and amortized to interest and finance costs during the life of the related debt instrument using the effective interest method. Unamortized feesAny unamortized balance of costs relating to loans repaid or refinanced as debt extinguishments and loan commitment fees areis expensed asin interest and finance costs in the period incurred in which the accompanying statements of comprehensive income.repayment or refinancing occurs, in accordance with the debt extinguishment guidance. Any unamortized balance of costs relating to refinanced long-term debt is deferred and amortized over the term of the credit facility in the period that such refinancing occurs, subject to the provisions of the accounting guidance prescribed under 470-50, Debt—Modifications and Extinguishments.Extinguishments.

F-13
2.Significant Accounting Policies and Recent Accounting Pronouncements (continued):

Offering costs
Expenses directly attributable to an equity offering are deferred and set off against the proceeds of the offering within paid-in capital, unless the offering is aborted, in which case they are written-off and charged to earnings.
Earnings/ (losses) per common share
Basic earnings/(losses) per common share are computed by dividing net income available to common stockholders after subtracting the dividends accumulated for the period on cumulative preferred stock (whether(if any, whether or not earned), and the deemed dividend on redemption of cumulative preferred stock, which was recognized during the year ended December 31, 2021, by the weighted average number of common shares outstanding during the period. Diluted earnings per common share, reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised.exercised.
Commitments and contingencies
Commitments are recognized when the Company has a present legal or constructive obligation as a result of past events and it is probable that an outflow of resources embodying economic benefits will be required to settle this obligation, and a reliable estimate of the amount of the obligation can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the present value of the expenditure expected to be required to settle the obligation. Contingent liabilities are not recognized in the financial statements but are disclosed unless the possibility of an outflow of resources embodying economic benefits is remote. Contingent assets are not recognized in the financial statements but are disclosed when an inflow of economic benefits is probable.
F-13

CASTOR MARITIME INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars – except for share data unless otherwise stated)

2.Significant Accounting Policies and Recent Accounting Pronouncements (continued):
Recent Accounting Pronouncements – AdoptedPronouncements:
Fair Value Measurement Disclosures — In August 2018, the FASB issued ASU No. 2018-13, "Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement" ("ASU No. 2018-13"). ASU No. 2018-13, which is part of the FASB's broader disclosure framework project, modifies and supplements the current U.S. GAAP disclosure requirements pertaining to fair value measurements, with an emphasis on Level 3 disclosures of the valuation hierarchy. The Company adopted this ASU for the reporting period commencing on January 1, 2020 and has adjusted its disclosures accordingly.
Recent Accounting Pronouncements –

Not Yet Adopted



The FASB has issued accounting standards that have not yet become effective and may impact the Company’s consolidated financial statements or related disclosures in future periods. These standards and their potential impact are discussed below:



In March 2020, the Financial Standard BoardFASB issued Accounting Standards Update (“ASU”) No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”)”. ASU 2020-04 provides temporary optional expedients and exceptions to the guidance in U.S. GAAP on contract modifications and hedge accounting to ease the financial reporting burdens related to expected market transition from LIBOR and other interbank offered rates to alternative reference rates. This ASU is effective for adoption at any time between March 12, 2020, and December 31, 2022. The Company is currently evaluating the impact of thisdoes not expect adoption in its consolidated financial statements and related disclosures.
In August 2020, the Financial Standard Board issued Accounting Standards Update (“ASU”) No. 2020-06 “Debt - Debt with Conversion and Other Options and Derivative and Hedging - Contracts in Entity's Own Equity”, which simplifies the accounting for convertible instruments. This guidance eliminates certain models that require separate accounting for embedded conversion features, in certain cases. Additionally, among other changes, the guidance eliminates certain of the conditions for equity classification for contracts in an entity’s own equity. The guidance also requires entitiestransition to use the if-converted method for all convertible instruments in the diluted earnings per share calculation and include the effect of share settlement for instruments that may be settled in cash or shares, except for certain liability-classified share-based payment awards. This guidance is required to be adopted by us in the first quarter of 2023 and must be applied using either a modified or full retrospective approach. The Company is currently evaluating the impact this guidancealternative reference rates will have a material impact on its consolidated financial statements.


In August 2020, the FASB issued ASU No. 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”). This standard removes the separation models for convertible debt with cash conversion or beneficial conversion features. It eliminates the “treasury stock” method for convertible instruments and requires application of the “if-converted” method for certain agreements. The Company adopted ASU 2020-06 on January 1, 2022, and this adoption had no impact on its consolidated financial statements as there was 0 outstanding convertible debt as of December 31, 2021.

F-14

CASTOR MARITIME INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars – except for share data unless otherwise stated)


3.Transactions with Related Parties:

During the year ended September 30, 2018, the Transition Period ended December 31, 2018 and the years ended December 31, 2019, 2020, and 2020,2021, the Company incurred the following charges in connection with related party transactions, which are included in the accompanying consolidated statements of comprehensive income/ (loss):
 
Year ended
September 30,
  
Three months ended
December 31,
  
Year ended
December 31,
  
Year ended
December 31,
 
 2018  2018  2019  2020  
Year ended
December 31,
2019
  
Year ended
December 31,
2020
  
Year ended
December 31,
2021
 
Management fees-related parties                     
Management fees – Pavimar (a) $111,480  $29,440  $212,300  $768,000  
$
212,300
  
$
768,000
  
$
4,761,000
 
Management fees – Castor Ships (d) —  —  —  162,500 
Management fees – Castor Ships (c)  
0
   
162,500
   
1,983,750
 
                        
Included in Voyage expenses                        
Charter hire commissions (b),(d) $—  $—  $40,471  $29,769 
Charter hire commissions – Castor Ships (c)(d) 
$
40,471
  
$
29,769
  
$
1,671,145
 
                        
Included in Interest and finance costs                        
Interest expenses (c) – Thalassa $—  $—  $162,500  $305,000 
Interest expenses (b) – Thalassa 
$
162,500
  
$
305,000
  
$
204,167
 
                        
Included in General and administrative expenses                        
Administration fees – Castor Ships (d) $—  $—  $—  $400,000 
Administration fees – Castor Ships (c) 
$
0
  
$
400,000
  
$
1,200,000
 
                        
Included in Vessels’ cost                        
Sale & purchase commission – Castor Ships (d) $—  $—  $—  $138,600 
Sale & purchase commission – Castor Ships (c) 
$
0
  
$
138,600
  
$
3,406,400
 

As of December 31, 20192020, and 2020,2021, balances with related parties consisted of the following:

  
December 31,
2019
  
December 31,
2020
 
Assets:      
Working capital advances granted to Pavimar (a) $759,386  $1,559,132 
         
Liabilities:        
Related party debt (c) – Thalassa $5,000,000  $5,000,000 
Accrued loan interest (c) – Thalassa  100,000   405,000 
Voyage Commissions due to Castor Ships (d)  —   1,941 
  
December 31,
2020
  
December 31,
2021
 
Assets:      
Due from Pavimar (a) – current
 
$
1,559,132
  
$
0
 
Due from Pavimar (a) – non-current  0   810,437 
Liabilities:        
Due to Pavimar (a) – current  0   3,909,885 
Related party debt (b) – Thalassa 
$
5,000,000
  
$
0
 
Accrued loan interest (b) – Thalassa  
405,000
   
0
 
Voyage commissions, management fees and other expenses due to Castor Ships (c)  
1,941
   
597,684
 



F-15
CASTOR MARITIME INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars – except for share data unless otherwise stated)

3.Transactions with Related Parties (continued):
(a)  Pavimar:
Each of the Company’s ship-owning subsidiaries havehas entered into separate vessel management agreements with Pavimar, a company controlled by Ismini Panagiotidis, the sister of Petros Panagiotidis (see Note 1). Pursuant to the terms of the management agreements, Pavimar provides the Company with a wide range of shipping services, including crew management, technical management, operational employment management, insurance arrangements,management, provisioning, bunkering, vessel accounting and audit support services, which it may choose to subcontract to other parties at its discretion, and provided commercial management until August 31, 2020, in exchange for a daily fee. During the year ended December 31, 2019, the daily fixed fee. Since November 13, 2017 of the Magic P was set at $320, whereas, the daily fixed fee on the other 2 vessels comprising the Company’s fleet, the Magic Sun and the Magic Moon, was each set from its acquisition date and up to December 31, 2019, the daily management fee of the sole vessel in the Company’s fleet at that time, the Magic P, was set at $320. The daily management fee on the Magic Sun and Magic Moon was set at $500 from their delivery date onwards. On$500. Effective January 1, 2020, and during the Magic P daily management fee was aligned via an amendment to its management agreement with that of the remaining fleet, and, as a result, up toeight-month period ended August 31, 2020, all the Company’s vessels then comprising its fleet were charged with a daily management fee of $500 per day per vessel.
On September 1, 2020, the Company’s then shipowning subsidiaries entered into revised shipmanagementship management agreements with Pavimar which replaced the then existing shipmanagementship management agreements in their entirety (the “Technical Management Agreements”). Pursuant to the terms of the Technical Management Agreements, effective September 1, 2020, Pavimar provides the Company’s shipowning subsidiaries with the range of technical, crewing, insurance and operational services stipulated in the previous agreements in exchange for which Pavimar is now paid a daily fee of $600 per vessel, which shallmay be also subject to an annual review on their anniversary date. The Technical Management Agreements have a term of five years, and such term automatically renews for a successive five-year term on each anniversary of their effective date, unless the agreements are terminated earlier in accordance with the provisions contained therein. In the event that the Technical Management Agreements are terminated by the ship-owningshipowning subsidiaries other than by reason of default by Pavimar, a termination fee equal to four4 times the total amount of the daily management fee calculated on an annual basis shall be payable from the ship-owningshipowning subsidiaries to Pavimar.
F-15
3.Transactions with Related Parties (continued):

As of December 31, 2021, Pavimar hashad subcontracted the technical management of 3 of the Magic NovaCompany’s dry bulk vessels and 9 of its tanker vessels and the operational management of 3 of its tanker vessels to a third-party ship-management company, Fleet Ship Management Inc. (“Fleet Ship”). Fleet Ship providescompanies. These third-party management companies provide technical and operational management to the Magic Novarespective vessels for a fixed annual fee which is paid by Pavimar at its own expense. The subcontractIn connection with the subcontracting services providedrendered by Fleet Ship to Pavimar have a minimum term of six months following delivery of the Magic Nova tothird-party ship-management companies, the Company and may be terminated at any time thereafter.
During the year ended September 30, 2018, the Transition Period endedhad, as of December 31, 20182021, paid Pavimar working capital guarantee deposits aggregating the amount of $1,568,689, of which $758,252 are included in Due to related party, current and $810,437 are presented in Due from related party, non-current in the accompanying consolidated balance sheets.
During the years ended December 31, 2019, 2020, and 2020,2021, the Company incurred management fees under the Technical Management Agreements amounting to $111,480, $29,440, $212,300, $768,000, and $768,000,$4,761,000, respectively, which are includedseparately presented in Management fees to related parties in the accompanying consolidated statements of comprehensive income/(loss).
In addition, each month Pavimar makesand its subcontractor third-party managers make payments for operating expenses with funds provided in advance bypaid from the Company.Company to Pavimar. As of December 31, 2019 and 2020, amountsan amount of $759,386 and $1,559,132 respectively, werewas due from Pavimar in relation to these working capital advances granted to it.
 (b) Alexandria Enterprises S.A:
During the year ended December 31, 2019,it, net of payments made by Pavimar on behalf of the Company used on a non-recurring basis the commercial services of Alexandria Enterprises S.A., (“Alexandria”) an entity controlled by a family member of the Company’s Chairman, Chief Executive Officer and Chief Financial Officer. In exchange for these services, Alexandria charged the Company a commission rate equal to 1.25% of the gross charter hire, freight and the ballast bonus earned under a charter agreement.
Commissions charged by Alexandria during the year ended December 31, 2019 amounted to $40,471 and are included in Voyage expenses in the accompanying consolidated statements of comprehensive income/(loss). The Company has stopped using the commercial services of Alexandria since January 1, 2020, and, accordingly, no relevant charges exist for the year ended December 31, 2020. Asvessels, whereas, as of December 31, 2019 and 2020, no amounts were due2021, an amount of $4,668,137 was owed to Alexandria.

F-16Pavimar in relation to payments made by Pavimar on behalf of the Company net of working capital advances granted to it.


(b) Thalassa:
CASTOR MARITIME INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars – except for share data unless otherwise stated)
3.Transactions with Related Parties (continued):
(c) Thalassa:
$5.0 Million Term Loan Facility
On August 30, 2019, the Company entered into a $5.0 million unsecured term loan with Thalassa, the proceeds of which were used to partly finance the acquisition of the Magic Sun (the “$5.0 Million Term Loan Facility”) (Note 5)7). The Company drew down the entire loan amount on September 3, 2019. The $5.0 Million Term Loan Facility bearsfacility bore a fixed interest rate of 6%6.00% per annum and hasinitially had a bullet repayment on March 3, 2021, which, pursuant to a supplemental agreement dated March 2, 2021, was granted a six-month extension. At its extended maturity, on September 3, 2021, the Company repaid $5.0 million of principal and $609,167 of accrued interest due and owing from it to Thalassa and, as a result, the Company, with effect from that date, which is eighteen (18) months after the drawdown date. The $5.0 Million Term Loan Facility may be prepaid in whole or in part at any time prior towas discharged from all its maturity, at the Company’s option.
liabilities and obligations under this facility.
The $5.0 Million Term Loan Facility contains event of default provisions and covenants customary for unsecured facilities of this type, including, but not limited to, failure to pay, bankruptcy and insolvency, material litigation, change of business, as further set forth in the provisions of the $5.0 Million Term Loan Facility. The $5.0 Million Term Loan Facility does not impose any financial covenant requirements or other minimum liquidity restrictions on the Company.
During the years ended December 31, 2019, 2020, and 2020,2021, the Company incurred interest costs in connection with the $5.0 Million Term Loan Facilityabove facility amounting to $100,000, $305,000, and $305,000,$204,167, respectively, which are included in Interest and finance costs in the accompanying consolidated statements of comprehensive income/(loss).
As of December 31, 2020, no amounts were prepaid under the $5.0 Million Term Loan Facility.
(d)(c) Castor Ships:
On September 1, 2020, the Company and its shipowning subsidiaries entered into a master management agreement (the “Master Agreement”) with Castor Ships. Pursuant to the terms of the Master Agreement each of the Company’s shipowning subsidiaries also entered into separate commercial shipmanagementship management agreements with Castor Ships (the “Commercial Shipmanagement Agreements” and together with the Master Agreement, the “Castor Ships Management Agreements”). Under the terms of the Castor Ships Management Agreements, Castor Ships manages overall the Company’s business and provides commercial ship management, chartering and administrative services, including, but not limited to, securing employment for the Company’s fleet, arranging and supervising the vessels’ commercial operations,functions, handling all the Company’s vessel sale and purchase transactions, undertaking related shipping project and management advisory and support services, as well as other associated services requested from time to time by the Company and its shipowning subsidiaries. In exchange for these services, the Company and its subsidiaries pay Castor Ships (i) a flat quarterly management fee in the amount of $0.3 million for the management and administration of the Company’s business, (ii) a daily fee of $250 per vessel for the provision of the services under the Commercial Shipmanagement Agreements, (iii) a commission rate of 1.25% on all charter agreements arranged by Castor Ships and (iv) a commission of 1% on each vessel sale and purchase transaction.
F-16
3.Transactions with Related Parties (continued):

The Castor Ships Management Agreements have a term of five years, and such term automatically renews for a successive five-year term on each anniversary of the effective date, unless the agreements are terminated earlier in accordance with the provisions contained therein. In the event that the Castor Ships Management Agreements are terminated by the Company or are terminated by Castor Ships due to a material breach of the Master Agreement by the Company or a change of control in the Company, Castor Ships shall be entitled to a termination fee equal to four4 times the total amount of the flat management fee and the per vessel management fees calculated on an annual basis. The Commercial Shipmanagement Agreements also provide that the management fees shallmay be subject to an annual review on their anniversary.
During the yearyears ended December 31, 2020, and 2021, the Company incurred (i) management fees amounting to $400,000 and $1,200,000, respectively, for the management and administration of the Company’s business, which are included in General and administrative expenses in the accompanying consolidated statements of comprehensive income/(loss), (ii) management fees amounting to $162,500 and $1,983,750, respectively, for the provision of the services under the Commercial Shipmanagement Agreements which are included in Management fees to related parties in the accompanying consolidated statements of comprehensive income/(loss), (iii) charter hire commissions amounting to $29,769 and $1,671,145, respectively, which are included in Voyage expenses in the accompanying consolidated statements of comprehensive income/(loss) and (iv) sale and purchase commission amounting to $138,600 and $3,406,400, respectively, which isare included in Vessels, net in the accompanying consolidated balance sheet.sheets.

(d) Alexandria Enterprises S.A:
During the year ended December 31, 2019, the Company used on a non-recurring basis the commercial services of Alexandria Enterprises S.A., (“Alexandria”) an entity controlled by a family member of the Company’s Chairman, Chief Executive Officer and Chief Financial Officer. In exchange for these services, Alexandria charged the Company a commission rate equal to 1.25% of the gross charter hire, freight and the ballast bonus earned under a charter agreement.
Commissions charged by Alexandria during the year ended December 31, 2019, amounted to $40,471 and are included in Voyage expenses in the accompanying consolidated statements of comprehensive income/(loss). The Company has stopped using the commercial services of Alexandria since January 1, 2020, and, accordingly, 0 relevant charges exist for the years ended December 31, 2020, and 2021. As of December 31, 2020, and 2021, 0 amounts were due to Alexandria.

(e) Vessel Acquisitions:

On October 14, 2019, the Company, through a separate wholly owned subsidiary, entered into an agreement to purchase a 2005 Japanese built Panamax dry bulk carrier, the Magic Moon, at a gross purchase price of $10.2 million from a third-party in which an immediate family member of Petros Panagiotidis had a minority interest. The Magic Moon was delivered to the Company on October 20, 2019. The Magic Moon acquisition was financed using a combination of cash on hand, the net proceeds raised under the Company’s First ATM Program, discussed in Note 8 below, and the proceeds from a $7.5 million bridge loan provided to the Company by Thalassa on October 17, 2019.
F-17

CASTOR MARITIME INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars – except for share data unless otherwise stated)
4.Deferred charges, net:
The movement in deferred dry-docking costs, net in the accompanying consolidated balance sheets is as follows:
 Dry-docking costs  
Dry-docking
costs
 
Balance September 30, 2018 $443,394 
Amortization (102,324)
Balance December 31, 2018 $341,070  $341,070 
Amortization (341,070)  (341,070)
Balance December 31, 2019 $—  $0 
Additions 2,216,102   2,216,102 
Amortization (154,529)  (154,529)
Balance December 31, 2020 $2,061,573  $2,061,573 
Additions  3,936,331 
Amortization  (1,135,080)
Balance December 31, 2021
 $4,862,824 

On February 14,November 27, 2020, the Magic PMoon commenced its scheduled dry-dock which was completed on March 21, 2020January 13, 2021. During the year ended December 31, 2021, 3 more vessels in the Company’s fleet initiated and on November 20, 2020 the Magic Sun commenced itscompleted their scheduled dry-dock, whichthe Magic Rainbow the Wonder Mimosa and the Magic Vela.
5.Fair value of acquired time charter:

In connection with the acquisition of the Magic Pluto in May 2021 with a time charter attached (the “Magic Pluto Attached Charter”), the Company initially recognized an intangible liability of $1,940,000, representing the fair value of the time charter acquired. The Magic Pluto Attached Charter commenced upon the vessel’s delivery, on August 8, 2021, and was completed on December 24, 2020. The Magic Moonconcluded within the fourth quarter of 2021. Accordingly, the respective intangible liability was undergoing dry-dock as offully amortized during that period.

For the year ended December 31, 2020. Amortization2021, the amortization of deferred dry-docking coststhe below market acquired time charter related to the Magic Pluto acquisition amounting to $1,940,000 is included in Depreciation and amortizationVessel revenues in the accompanying consolidated statements of comprehensive income/(loss).
 
6.Vessels, net/ Advances for vessel acquisition:
(a) Vessels, net:

The amounts in the accompanying consolidated balance sheets are analyzed as follows:
  Vessel Cost  Accumulated depreciation  Net Book Value 
Balance December 31, 2019
  24,810,061   (1,110,032)  23,700,029 
— Acquisitions, improvements, and other vessel costs  36,096,033   —   36,096,033 
— Period depreciation  —   (1,750,434)  (1,750,434)
Balance December 31, 2020
  60,906,094   (2,860,466)  58,045,628 
— Acquisitions, improvements, and other vessel costs  299,460,599   —   299,460,599 
— Transfers from Advances for vessel acquisitions (b)  49,687,450   —
   49,687,450 
— Period depreciation  —   (13,227,748)  (13,227,748)
Balance December 31, 2021
  410,054,143   (16,088,214)  393,965,929 

F-18
5.6.Vessels, net:net/ Advances for vessel acquisition (continued):

Vessel Acquisitions and other Capital Expenditures:

During the year ended December 31, 2021, the Company agreed to acquire 14 dry bulk carriers and 9 tanker vessels for an aggregate cash consideration of $363.6 million (the “2021 Vessel Acquisitions”). Of the 2021 Vessel Acquisitions, 22 were concluded during the year ended December 31, 2021, whereas the last one, this of the Magic Callisto, was concluded on January 4, 2022 (Note 18). The 2021 Vessel Acquisitions were financed with cash on hand and the net proceeds from the debt and equity financings discussed under Notes 7 and 8 below. Details regarding the 2021 Vessel Acquisitions delivered as of December 31, 2020 and 2021, are presented below.
Vessel NameVessel TypeDWTYear BuiltCountry of ConstructionPurchase Price (in million)Delivery Date
2020 Acquisitions
Magic RainbowPanamax73,5932007China$7.8508/08/2020
Magic HorizonPanamax76,6192010Japan$12.7510/09/2020
Magic NovaPanamax78,8332010Japan$13.8610/15/2020
2021 Acquisitions
Magic VenusKamsarmax83,4162010Japan$15.8503/02/2021
Wonder PolarisAframax LR2115,3512005S. Korea$13.6003/11/2021
Magic OrionCapesize180,2002006Japan$17.5003/17/2021
Magic ArgoKamsarmax82,3382009Japan$14.5003/18/2021
Wonder SiriusAframax LR2115,3412005S. Korea$13.6003/22/2021
Magic TwilightKamsarmax80,2832010S. Korea$14.8004/09/2021
Magic ThunderKamsarmax83,3752011Japan$16.8504/13/2021
Magic VelaPanamax75,0032011China$14.5005/12/2021
Magic NebulaKamsarmax80,2812010S. Korea$15.4505/20/2021
Wonder VegaAframax106,0622005S. Korea$14.8005/21/2021
Magic StarlightKamsarmax81,0482015China$23.5005/23/2021
Wonder AviorAframax LR2106,1622004S. Korea$12.0005/27/2021
Wonder ArcturusAframax LR2106,1492002S. Korea$10.0005/31/2021
Wonder MimosaHandysize36,7182006S. Korea$7.2505/31/2021
Magic EclipsePanamax74,9402011Japan $18.4806/07/2021
Wonder MusicaAframax LR2106,2902004S. Korea$12.0006/15/2021
Wonder FormosaHandysize36,6602006S. Korea$8.0006/22/2021
Magic PlutoPanamax74,9402013Japan$19.0608/06/2021
Magic PerseusKamsarmax82,1582013Japan$21.0008/09/2021
Magic MarsPanamax76,8222014S. Korea$20.4009/20/2021
Magic PhoenixPanamax76,6362008Japan$18.7510/26/2021
Wonder BellatrixAframax LR2115,3412006S. Korea$18.1512/23/2021

During the year ended December 31, 2021, the Company incurred aggregate vessel improvement costs of $1.8 million mainly relating to (i) the purchase and installation of a ballast water management system (“BWMS”) on the Wonder Mimosa during the vessel’s dry dock that was initiated late in the second quarter of 2021 and concluded early in the third quarter of 2021, and (ii) the consideration paid to acquire the BWMS equipment of the Magic Vela and additional BWMS installation costs incurred during the vessel’s dry dock that was initiated in the third quarter and concluded in the fourth quarter of 2021.

During the year ended December 31, 2020, the Company incurred aggregate vessel improvement costs of $1.0 million relating to (i) the purchase and partial installation of a BWMS on the Magic P, and (ii) the purchase and installation of a BWMS on the Magic Sun.

As of December 31, 2021, 13 of the 28 vessels in the Company’s fleet having an aggregate carrying value of $164.7 million were first priority mortgaged as collateral to their loan facilities (Note 7).

Consistent with prior practices, the Company reviewed all its vessels for impairment, and none were found to be impaired at December 31, 2020 and December 31, 2021.
 
F-19
6.Vessels, net/ Advances for vessel acquisition (continued):

(b)Advances for vessel acquisition

The amounts in the accompanying consolidated balance sheets are analyzed as follows:

  Vessel Cost  Accumulated depreciation  Net Book Value 
Balance September 30, 2018 $7,549,281  $(478,877) $7,070,404 
—Period depreciation  —   (75,054)  (75,054)
Balance December 31, 2018 $7,549,281  $(553,931) $6,995,350 
— Acquisitions  17,260,780   —   17,260,780 
—Yearly depreciation  —   (556,101)  (556,101)
Balance December 31, 2019 $24,810,061  $(1,110,032) $23,700,029 
— Acquisitions and other improvements to fleet vessels  36,096,033   —   36,096,033 
—Yearly depreciation  —   (1,750,434)  (1,750,434)
Balance December 31, 2020  60,906,094   (2,860,466)  58,045,628 
  Vessel Cost 
Balance December 31, 2020 $0 
— Advances for vessel acquisitions and other vessel pre-delivery costs  52,055,615 
—Transfer to Vessels, net (a)  (49,687,450)
Balance December 31, 2021 $2,368,165 
Vessel Acquisitions and other Capital Expenditures:
On August 8, 2020, pursuant to an agreement entered into on June 30, 2020 with an unaffiliated third party, the Company took delivery of its fourth Panamax dry bulk carrier vessel, the Magic Rainbow, which it acquired for a cash consideration of $7.85 million, excluding acquisition costs.
On October 9, 2020, pursuant to an agreement entered into on July 28, 2020 with an unaffiliated third party, the Company took delivery of its fifth Panamax dry bulk carrier vessel, the Magic Horizon, which it acquired for a cash consideration of $12.75 million, excluding acquisition costs.
On October 15, 2020, pursuant to an agreement entered into on September 28, 2020 with an unaffiliated third party, the Company took delivery of its sixth Panamax dry bulk carrier vessel, the Magic Nova, which it acquired for a cash consideration of $13.86 million, excluding acquisition costs.
During the year ended December 31, 2020,2021, the Company completedtook delivery of the partial installation onvessels discussed under (a) above and, hence, certain advances paid in the Magic P and the complete installation on the Magic Sunperiod for these vessels were transferred from Advances for vessel acquisitions to Vessels, net. The balance of a ballast water management system (“BWMS”)Advances for which it incurred aggregated capitalized expenditures amounting approximately to $1.0 million (Note 9(a)).
F-18

CASTOR MARITIME INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars – except for share data unless otherwise stated)

5.Vessels, net (continued):
Asvessel acquisition as of December 31, 2020, three out2021, reflects the advance payment made for the acquisition of the six vessels in the Company’s fleet having an aggregate carrying value of $23,393,835 were first priority mortgaged as collateral to their loan facilitiesMagic Callisto (Note 6)18).
6.7.Long-Term Debt:
The amount of long-term debt (including related party debt discussed under Note 3) shown in the accompanying consolidated balance sheet of December 31, 2020,2021, is analyzed as follows:
   Year Ended 
Loan facilities
Borrowers- Issuers
 December 31, 2019  December 31, 2020 
$11.0 Million Alpha Bank Facility (a)Spetses- Pikachu $11,000,000  $9,400,000 
$4.5 Million Chailease Financial Services Facility (b)Bistro  —   4,050,000 
Total long-term debt  $11,000,000  $13,450,000 
Less: Deferred financing costs   (242,940)  (264,134)
Total long-term debt, net of deferred finance costs  $10,757,060   13,185,866 
          
Presented:
         
Current portion of long-term debt  $1,600,000  $2,200,000 
Less: Current portion of deferred finance costs   (77,105)  (97,963)
Current portion of long-term debt, net of deferred finance costs  $1,522,895  $2,102,037 
          
Non-Current portion of long-term debt   9,400,000   11,250,000 
Less: Non-Current portion of deferred finance costs   (165,835)  (166,171)
Non-Current portion of long-term debt, net of deferred finance costs  $9,234,165  $11,083,829 
          
Debt instruments from related party
         
$5.0 Million Term Loan Facility (Note 3(c))Castor  5,000,000   5,000,000 
Total long-term debt from related party  $5,000,000  $5,000,000 
     Year Ended 
Loan facilitiesBorrowers
 
December 31,
2020
  
December 31,
2021
 
$11.0 Million Term Loan Facility (a)
Spetses- Pikachu $9,400,000  $7,800,000 
$4.5 Million Term Loan Facility (b)
Bistro  4,050,000   3,450,000 
$15.29 Million Term Loan Facility (c)
Pocahontas- Jumaru  0   13,877,000 
$18.0 Million Term Loan Facility (d)
Rocket- Gamora  0   16,300,000 
$40.75 Million Term Loan Facility (e)
Liono-Snoopy-Cinderella-Luffy  0   39,596,000 
$23.15 Million Term Loan Facility (f)
Bagheera-Garfield  0   22,738,500 
Total long-term debt  $13,450,000  $103,761,500 
Less: Deferred financing costs   (264,134)  (1,720,101)
Total long-term debt, net of deferred finance costs  $13,185,866   102,041,399 
          
Presented:
         
Current portion of long-term debt  $2,200,000  $16,688,000 
Less: Current portion of deferred finance costs   (97,963)  (596,277)
Current portion of long-term debt, net of deferred finance costs  $2,102,037  $16,091,723 
          
Non-Current portion of long-term debt   11,250,000   87,073,500 
Less: Non-Current portion of deferred finance costs   (166,171)  (1,123,824)
Non-Current portion of long-term debt, net of deferred finance costs  $11,083,829  $85,949,676 
          
Debt instruments from related party         
$5.0 Million Term Loan Facility (Note 3(b))
Castor  5,000,000   0 
Total long-term debt from related party, current  $5,000,000  $0 
F-20
7.Long-Term Debt (continued):

a.$11.0 Million Alpha BankTerm Loan Facility:
On November 22, 2019, 2 of the Company, through two of its wholly-ownedCompany’s wholly owned dry bulk vessel ship-owning subsidiaries, Spetses and Pikachu owning the Magic P and the Magic Moon (the “Borrowers”), respectively, entered into a $11.0 millionthe Company’s first senior secured term loan facility in the amount of $11.0 million with Alpha Bank A.E., or the $11.0 Million Alpha Bank Facility.S.A. The facility was drawn down in 2 tranches on December 2, 2019. The $11.0 Million Alpha Bank FacilityThis facility has a term of five years from the drawdown date, bears interest at a margin over LIBOR per annum and is repayable in twenty20 (20) equal quarterly instalments of $400,000 each, plus a balloon instalment of $3.0 million payable simultaneously with the last instalment at maturity, on December 2, 2024. The above facility is secured by, including but not limited to, a first preferred mortgage and first priority general assignment covering earnings, insurances and requisition compensation over the vessels owned by the Borrowers,borrowers, an earnings account pledge, shares security deed relating to the shares of the vessels’ owning subsidiaries, manager’s undertakings and is guaranteed by the Company. The $11.0 Million Alpha Bank Financing net proceeds were partly used by the Company in order to repay the $7.5 Million Bridge Loan on December 6, 2019, whereas, the remainder of the proceeds was used for general corporate purposes including financing vessel acquisitions.
The $11.0 Million Alpha Bank Facilityrespective facility also contains certain customary minimum liquidity restrictions and financial covenants that require the Borrowers to:
F-19

CASTOR MARITIME INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars – except for share data unless otherwise stated)
6.Long-Term Debt (continued):
borrowers to (i) maintain a certain level of minimum free liquidity of at least $250,000 per collateralized vessel, (“the Minimum Liquidity Deposit”); and
(ii) meet a specified minimum security requirement ratio, which is the ratio of the aggregate market value of the mortgaged vessels plus the value of any additional security and the value of the Minimum Liquidity Depositminimum free liquidity requirement referred to above to the aggregate principal amounts due under the $11.0 Million Alpha Bank Facility;facility. This facility’s net proceeds were partly used by the Company to repay the $7.5 million bridge loan on December 6, 2019, whereas the remainder of the proceeds was used for general corporate purposes including financing vessel acquisitions.
b.$4.5 Million Chailease Financial ServicesTerm Loan Facility:
On January 23, 2020, pursuant to the terms of a credit agreement, the Company, through one of its wholly-owned subsidiaries owning the Magic Sun,Company’s wholly owned dry bulk vessel ship-owning subsidiary, Bistro, entered into a $4.5 million senior secured term loan facility with Chailease International Financial Services Co., Ltd., or the Chailease Financial Services Facility. The loanfacility was drawn down on January 31, 2020, is repayable in twenty20 (20) equal quarterly installments of $150,000 each, plus a balloon installment of $1.5 million payable simultaneously with the last instalment at maturity, and bears interest at a margin over LIBOR per annum. The above facility contains a standard security package including a first preferred mortgage on the vessel owned by the borrower (the Magic Sun),pledge of bank account, charter assignment, shares pledge and a general assignment over the vessel'svessel’s earnings, insurances and any requisition compensation in relation to the vessel owned by the borrower and is guaranteed by the Company and Pavimar. Pursuant to the terms of the Chailease Financial Services Facility,this facility, the Company is also subject to certain minimum liquidity restrictions requiring the borrower to maintain a $400,000certain credit balance within an account of the lender (the “Cash Collateral”)as “cash collateral” as well as certain negative covenants customary for facilities of this type of facilities, negative covenants. The Company shall, from the first anniversary of the drawdown date, be entitled to withdraw up to $200,000 in aggregate from this balance provided no default has occurred. As a result of the above, the $200,000 of the Cash Collateral was classified in Prepaid expenses and other assets, current in the accompanying consolidated balance sheet with the balance having been classified in Prepaid expenses and other assets, non-current. 
type. The credit agreement governing the Chailease Financial Services Facilitythis facility also requires maintenance of a maximumminimum value to loan ratio being the aggregate principal amount of (i) fair market value of the collateral vessel and (ii) the value of any additional security (including the Cash Collateral)cash collateral referred to above), to the aggregate principal amount of the loan. This facility’s net proceeds were used to fund the 2021 Vessel Acquisitions (see Note 6(a)) and for general corporate purposes.

c.$15.29 Million Term Loan Facility
On January 22, 2021, pursuant to the terms of a credit agreement, 2 of the Company’s wholly owned dry bulk vessel ship-owning subsidiaries, Pocahontas and Jumaru, entered into a $15.29 million senior secured term loan facility with Hamburg Commercial Bank AG. The loan was drawn down in 2 tranches on January 27, 2021, is repayable in 16 (16) equal quarterly installments of $471,000 each, plus a balloon installment in the amount of $7.8 million payable at maturity and bears interest at a margin over LIBOR per annum. The above facility contains a standard security package including first preferred mortgages on the vessels owned by the borrowers, (the Magic Horizon and the Magic Nova) pledge of bank accounts, charter assignments and a general assignment over the vessels’ earnings, insurances and any requisition compensation in relation to the vessels owned by the borrowers, and is guaranteed by the Company. Pursuant to this facility, the Company is also subject to a certain minimum liquidity restriction requiring the borrowers to maintain a certain cash balance with the lender, to maintain and gradually fund certain dry-dock reserve accounts in order to ensure the payment of any costs incurred in relation to the next dry-docking of each mortgaged vessel, as well as to certain negative covenants customary, for facilities of this type. The credit agreement governing this facility also requires maintenance of a minimum security cover ratio being the aggregate amount of (i) the aggregate market value of the collateral vessels, (ii) the value of the minimum liquidity deposits referred to above, (iii) the value of the dry-dock reserve accounts referred to above and (iv) any additional security provided, over the aggregate principal amount of the loan outstanding.

This facility’s net proceeds were used to fund the 2021 Vessel Acquisitions (Note 6(a)) and for general corporate purposes.

F-21
7.Long-Term Debt (continued):

d.
$18.0 Million Term Loan Facility

On April 27, 2021, 2 of the Company’s wholly owned tanker vessel ship-owning subsidiaries, Rocket and Gamora, entered into a $18.0 million senior secured term loan facility with Alpha Bank S.A. The facility was drawn down in 2 tranches on May 7, 2021. This facility has a term of four years from the drawdown date, bears interest at a margin over LIBOR per annum and is repayable in (a) 16 (16) quarterly instalments (1 to 4 in the amount of $850,000 and 5 to 16 in the amount of $675,000) and (b) a balloon installment in the amount of $6.5 million, such balloon instalment payable at maturity together with the last repayment instalment. The above facility is secured by first preferred mortgage and first priority general assignment covering earnings, insurances and requisition compensation over the vessels owned by the borrowers, (the Wonder Sirius and the Wonder Polaris), an earnings account pledge, shares security deed relating to the shares of the vessels’ owning subsidiaries, manager’s undertakings and is guaranteed by the Company. The facility also contains certain customary minimum liquidity restrictions and financial covenants that require the borrowers to (i) maintain a certain level of minimum free liquidity per collateralized vessel and (ii) meet a specified minimum security requirement ratio, which is the ratio of the aggregate market value of the mortgaged vessels plus the value of any additional security and the value of the minimum liquidity deposits referred to above, to the aggregate principal amounts due under the facility. This facility’s net proceeds were used to fund the 2021 Vessel Acquisitions (Note 6(a)) and for general corporate purposes.

c.e.$40.75 Million Term Loan Facility

On July 23, 2021, pursuant to the terms of a credit agreement, 4 of the Company’s wholly owned dry bulk vessel ship-owning subsidiaries, Liono, Snoopy, Cinderella and Luffy, entered into a $40.75 million senior secured term loan facility with Hamburg Commercial Bank AG. The loan was drawn down in 4 tranches on July 27, 2021, is repayable in 20 (20) equal quarterly installments of $1,154,000 each, plus a balloon installment in the amount of $17.7 million payable at maturity simultaneously with the last instalment and bears interest at a margin over LIBOR per annum. The above facility contains a standard security package including first preferred mortgages on the vessels owned by the borrowers, pledge of bank accounts, charter assignments, and a general assignment over the vessels’ earnings, insurances and any requisition compensation in relation to the vessels owned by the borrowers(the Magic Thunder, Magic Nebula, Magic Eclipse and the Magic Twilight), and is guaranteed by the Company. The Company is also subject to a certain minimum liquidity restriction requiring the borrowers to maintain a certain minimum cash balance with the lender (a specified portion of which shall be released to the borrowers following the repayment of the fourth installment with respect to all 4 tranches), to maintain and gradually fund certain dry-dock reserve accounts to ensure the payment of any costs incurred in relation to the next dry-docking of each mortgaged vessel, as well as to certain negative covenants customary for facilities of this type. The credit agreement governing this facility also requires maintenance of a minimum security cover ratio being the aggregate amount of (i) the aggregate market value of the collateral vessels, (ii) the value of the dry-dock reserve accounts referred to above and, (iii) any additional security provided, over the aggregate principal amount outstanding of the loan. This facility’s net proceeds were used to fund the 2021 Vessel Acquisitions (Note 6(a)) and for general corporate purposes.

f.$23.15 Million Term Loan Facility

On November 22, 2021, pursuant to the terms of a credit agreement, 2 of the Company’s wholly owned dry bulk vessel ship-owning subsidiaries, Bagheera and Garfield, entered into a $23.15 million senior secured term loan facility with Chailease International Financial Services (Singapore) Pte. Ltd. The loan was drawn down in 2 tranches on November 24, 2021, the first in a principal amount of $10.15 million and the second in a principal amount of $13.0 million. Both tranches mature five years after the drawdown date and are repayable in 60 (60) monthly installments (1 to 18 in the amount of $411,500 and 19 to 59 in the amount of $183,700) and (b) a balloon installment in the amount of $8.2 million payable at maturity simultaneously with the last instalment and bear interest at a margin over LIBOR per annum. The above facility contains a standard security package including first preferred mortgages on the vessels owned by the borrowers, pledge of bank accounts, shares security deed relating to the shares of the vessels’ owning subsidiaries, charter assignments, shares pledge, and a general assignment over the vessels’ earnings, insurances and any requisition compensation in relation to the vessels owned by the borrowers (the Magic Rainbow and the Magic Phoenix) and is guaranteed by the Company. Pursuant to this facility, the Company is also subject to certain negative covenants customary for facilities of this type and a certain minimum liquidity restriction requiring the borrowers to maintain a certain minimum cash balance with the lender. This facility’s net proceeds were used to fund the 2021 Vessel Acquisitions (Note 6(a)) and for general corporate purposes.
F-22
7.Long-Term Debt (continued):

g.
$5.0 Million Convertible Debentures:
On January 27, 2020, the Company entered into a securities purchase agreement with an institutional investor, YAII PN, LTD, or the Investor, pursuant to which, on January 27, 2020, February 10, 2020 and February 19, 2020, the Company issued and sold to the Investor threethat investor 3 unsecured convertible debentures that were convertible into shares of the Company’s common stock, in original principal amounts of $2.0 million, $1.5 million and $1.5 million each, respectively (individually, a “Convertible Debenture” and collectively, the “$5.0 Million Convertible Debentures”).respectively. The $5.0 Million Convertible Debenturesconvertible debentures originally matured 12 months from their issuance dates, bore fixed interest at 6% per annum, and were convertible at the Investor’sinvestor’s option, at any time after issuance, into common shares of the Company at the lower of (i) a price of $2.25 per common share or (ii) 90% of the lowest daily volume weighted average price of the common stock during the 10 trading days prior to the conversion date. As of June 8, 2020, the Investorinvestor had converted the full aggregate principal amount and interest owed with respect to the $5.0 Convertible Debenturesconvertible debentures aggregating to an amount of $5,057,773 and the Company issued 8,042,078804,208 common shares in settlement thereof.
The Company accounted for the issuance of the convertible debentures in accordance with the BCF guidance in ASC 470-20 and accordingly recognized the BCFs, amounting to $532,437, separately at issuance by allocating a portion of the proceeds equal to the intrinsic value of these features to additional paid-in capital. The intrinsic value of each BCF was calculated at the commitment date as the difference between the conversion price and the fair value of the common stock, multiplied by the number of shares into which the security was convertible. Following the conversionsconversion by the Investorinvestor of the amounts owed under the $5.0 Million Convertible Debentures,above convertible debentures, the Company, as of December 31, 2020, recognized all unamortized discounts at the conversion dates as interest expense which are included in Interest and Finance Costs in the accompanying consolidated statements of comprehensive income/(loss).
As of December 31, 2020, and 2021, the Company was in compliance with all financial covenants prescribed in its debt agreements.
F-20

CASTOR MARITIME INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars – except for share data unless otherwise stated)
6.Long-Term Debt (continued):
Restricted cash as of December 31, 20192021, current and non-current, includes (i) $4.6 million of minimum liquidity deposits required pursuant to the $11.0 million term loan facility, the $18.0 million term loan facility, the $15.29 million term loan facility and the $40.75 million term loan facility discussed above, (ii) $0.2 million in the dry-dock reserve accounts required under the $15.29 million term loan facility and the $40.75 million term loan facility discussed above, and (iii) $1.4 million of retention deposits.

Restricted cash as of December 31, 2020, includes $500,000$0.5 million of non-legally restricted cash as per the $11.0 Million Alpha Bank Facilitymillion term loan facility’s minimum liquidity requirements (as discussed above), or $250,000$0.25 million per collateralized vessel.
The annual principal payments for the Company’s outstanding debt arrangements as of December 31, 2020 (including related party debt discussed under Note 3),2021, required to be made after the balance sheet date, are as follows:
Year ending December 31, Amount 
2021 $7,200,000 
2022  2,200,000 
2023  2,200,000 
2024  5,200,000 
2025  1,650,000 
Total long-term debt (including related party debt) $18,450,000 
Year ending December 31, Amount 
2022 $16,688,000 
2023  14,743,400 
2024  16,604,400 
2025  24,545,400 
2026  31,180,300 
Total long-term debt
 $103,761,500 

F-23
7.Long-Term Debt (continued):

The weighted average interest rate on the Company’s long-term debt for the years ended December 31, 20192020, and 20202021 was 5.8%5.0% and 5.0%3.6% respectively.
Total interest incurred on long-term debt for the years ended December 31, 20192020, and 2020,2021, amounted to $210,085$1,030,925 and $1,030,925$2,232,843 respectively, and is included in Interest and finance costs (Note 14)15) in the accompanying consolidated statements of comprehensive income/(loss).
7.8.Equity Capital Structure:
Under the Company'sCompany’s articles of incorporation, the Company'sCompany’s authorized capital stock consists of 2,000,000,000 shares, par value $0.001 per share, of which 1,950,000,000 shares are designated as common shares and 50,000,000 shares are designated as preferred shares.
(a)Common Shares:
Each outstanding common share entitles the holder to one1 vote on all matters submitted to a vote of shareholders. Subject to preferences that may be applicable to any outstanding preferred shares, common shareholders are entitled to receive ratably all dividends, if any, declared by the Company'sCompany’s board of directors out of funds legally available for dividends. Upon the Company'sCompany’s dissolution or liquidation or the sale of all or substantially all of its assets, after payment in full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation preferences, the common shareholders are entitled to receive pro rata the remaining assets available for distribution. Common shareholders do not have conversion, redemption or preemptive rights to subscribe to any of the Company'sCompany’s securities. The rights, preferences and privileges of common shareholders are subject to the rights of the holders of any preferred shares, which the Company has or may issue in the future.
At-the-market
June 2019 at-the-market common stock offering program (the “First ATM Program”)
 
On June 28, 2019, the Company, entered into an equity distribution agreement, or as commonly referred to, an at-the-market offering, with Maxim Group LLC (“Maxim”), under which the Company may sell an aggregate offering price of up to $10,000,000 of its common stock with Maxim acting as a sales agent over a minimum period of 12 months, (the “ATM Program”).under which the Company could, from time to time, offer and sell shares of its common stock through an at-the-market offering program. No warrants, derivatives, or other share classes were associated with this transaction. As of December 31,During the period from July 15, 2019, up to September 9, 2019, the Company had received $2,625,590raised gross proceeds under the ATM Program by issuing 618,112 common shares, whereas, theand net proceeds under the ATM Program, after(after deducting sales commissions and other transaction fees and expenses, amounted to $2,319,701. Noexpenses) under the First ATM Program of $2.6 million and $2.3 million, respectively, by issuing and selling 61,811 common shares. NaN further sales have been effected byunder the First ATM Program occurred since then. On June 21, 2021, the Company in connection with itsterminated the First ATM Program, and, as of December 31, 2020.a result, it has not incurred any further sales under it.
F-21

CASTOR MARITIME INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars – except for share data unless otherwise stated)

7.Equity Capital Structure (continued):
Issuance ofJune 2020 underwritten common stock in connection with the $5.0 Million Convertible Debentures
During the period from February 20, 2020 to June 8, 2020, the Company issued 8,042,078 common shares upon the conversion of the $5.0 Million Convertible Debentures in their entirety (see Note 6 for further discussion on this topic).
Underwritten common stock and Class A Warrants follow-on offering (the “2020 June Equity Offering”)
On June 23, 2020, the Company entered into an agreement with Maxim Group LLC, or Maxim, which actedacting as underwriter, pursuant to which it offered and sold 59,110,0005,911,000 units, each unit consisting of (i) one1 common share or a pre-funded warrant to purchase one1 common share at an exercise price equal to $0.01$0.10 per common share (a “Pre-Funded Warrant”), and (ii) one1 Class A Warrant to purchase one1 common share (a “Class A Warrant”), for $0.35$3.50 per unit (or $0.34$3.40 per unit including a pre-funded warrant), or the June Equity Offering. The June Equity Offering, whichPre-Funded Warrant). This offering closed on June 26, 2020 and resulted in the issuance of 59,082,6865,908,269 common shares (the “June“ 2020 June Equity Offering Shares”) and 59,110,0005,911,000 Class A Warrants, which also included 7,710,000771,000 over-allotment units pursuant to an over-allotment option that was exercised by Maxim on June 24, 2020.2020. The Company raised gross and net cash proceeds from this transaction of $20.7 million and $18.6 million, respectively.
The Class A Warrants issued in the June Equity Offeringabove offering have a term of five years and are exercisable immediately and throughout their term for $0.35$3.50 per common share (American style option). The exercise price of the Class A Warrants is subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Company’s common shares and also upon any distributions of assets, including cash, stock or other property to existing shareholders.
Between their issuance date, being June 26,
F-24
8.Equity Capital Structure (continued):

During the years ended December 31, 2020, and December 31, 2020,2021, there were exercises of 3,019,500301,950 and 5,546,706 Class A Warrants pursuant to which the Company received proceeds of $1,056,825,$1.1 million and $19.4 million, respectively, and, as a result, as of December 31, 2020, 56,090,5002021, 62,344 Class A Warrants remained unexercised and potentially issuable into common stock of the Company.
The Company accounted for the Class A Warrants as equity in accordance with the accounting guidance under ASC 815-40. The accounting guidance provides a scope exception from classifying and measuring as a financial liability a contract that would otherwise meet the definition of a derivative if the contract is both (i) indexed to the entity's own stock and (ii) meets the equity classifications conditions. The Company concluded these warrants were equity-classified since they contained no provisions which would require the Company to account for the warrants as a derivative liability, and therefore were initially measured at fair value in permanent equity with subsequent changes in fair value not measured.
On initial recognition the fair value of the Class A Warrants was $22.4 million and was determined using the Black-Scholes methodology. The fair value was considered by the Company to be classified as Level 3 in the fair value hierarchy since it was derived by unobservable inputs. The major unobservable input in connection with the valuation of the Class A Warrants was the volatility used in the valuation model, which was approximated by using historical observations of the Company’s share price. The annualized historical volatility that has been applied in the Class A Warrants valuation was 153.5%. A 5% increase in the volatility applied would have led to an increase of 1.4% in the fair value of the Class A Warrants.
First Registered Direct
2020 registered direct equity offering (the “2020 July Equity OfferingOffering”)
On July 12, 2020, the Company entered into agreements with certain unaffiliated institutional investors pursuant to which it offered and sold 57,750,0005,775,000 common shares in a registered offering or the July Equity Offering.offering. In a concurrent private placement, the Company also issued warrants to purchase up to 57,750,0005,775,000 common shares (the “Private Placement Warrants”). In connection with the July Equity Offering,this offering, which closed on July 15, 2020, the Company received gross and net cash proceeds of approximately $17.3 million and $15.7 million, respectively.
F-22

CASTOR MARITIME INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars – except for share data unless otherwise stated)

7.Equity Capital Structure (continued):

The 2020 Private Placement Warrants issued in the July Equity Offeringoffering discussed above have a term of five years and are exercisable immediately and throughout their term for $0.35$3.50 per common share (American style option). The exercise price of the Private Placement WarrantsWarrant is subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Company’s common shares and also upon any distributions of assets, including cash, stock or other property to existing shareholders.
Between their issuance date, being July 15, 2020 and December 31, 2020, there were no0 exercises of Private Placement Warrants. During the year ended December 31, 2021, there were exercises of 5,707,136 Private Placement Warrants and, as a result, aspursuant to which the Company received total gross proceeds of $20.0 million. As of December 31, 2020, 57,750,0002021, 67,864 Private Placement Warrants remained unexercised and potentially issuable into common stock of the Company.
The Company accounted for the Private Placement Warrants as equity in accordance with the accounting guidance under ASC 815-40. The accounting guidance provides a scope exception from classifying and measuring as a financial liability a contract that would otherwise meet the definition of a derivative if the contract is both (i) indexed to the entity's own stock and (ii) meets the equity classifications conditions. The Company concluded these warrants were equity-classified since they contained no provisions which would require the Company to account for the warrants as a derivative liability, and therefore were initially measured at fair value in permanent equity with subsequent changes in fair value not measured.
On initial recognition the fair value of the Private Placement Warrants was $13.2 million and was determined using the Black-Scholes methodology. The fair value was considered by the Company to be classified as Level 3 in the fair value hierarchy since it was derived by unobservable inputs. The major unobservable input in connection with the valuation of the Private Placement Warrants was the volatility used in the valuation model, which was approximated by using historical observations of the Company’s share price. The annualized historical volatility that has been applied in the Private Placement Warrants valuation was 153.2%. A 5% increase in the volatility applied would have led to an increase of 1.9% in the fair value of the Private Placement Warrants.
Nasdaq Listing Standards Compliance
On April 14, 2020, the Company received written notification from the Nasdaq Stock Market that it was not in compliance with the minimum $1.00 per share bid price requirement for continued listing on the Nasdaq Capital Market and was initially provided with 180 calendar days, or until October 12, 2020, to regain compliance with the subject requirement. On April 20, 2020, the Nasdaq Stock Market informed the Company that due to the COVID-19 crisis, temporary relief has been granted related to minimum listing bid price requirements and the Company’s compliance period would be suspended until June 30, 2020, thus extending the period to regain compliance to December 28, 2020.
2021 First Registered Direct Equity Offering

On December 30, 2020, the Company announced thatentered into agreements with certain unaffiliated institutional investors pursuant to which it receivedoffered and sold 9,475,000 common shares and warrants to purchase up to 9,475,000 common shares (the “January 5 Warrants”) in a notification letter from the Nasdaq Stock Market (“Nasdaq”) grantingregistered direct offering. In connection with this direct equity offering, which closed on January 5, 2021, the Company received gross and net cash proceeds of approximately $18.0 million and $16.5 million, respectively.

The January 5 Warrants issued in the above equity offering had a term of five years and were exercisable immediately and throughout their term for $1.90 per common share (American style option). The exercise price of the January 5 Warrants was subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Company’s common shares and upon any distributions of assets, including cash, stock or other property to existing shareholders.
 
F-25
8.Equity Capital Structure (continued):

As of February 10, 2021, all the January 5 Warrants had been exercised, and, pursuant to their exercise and the issuance by the Company of 9,475,000 common shares, the Company received gross and net proceeds of $18.0 million.

On initial recognition the fair value of the January 5 Warrants was $22.2 million and was determined using the Black-Scholes methodology. The fair value was considered by the Company to be classified as Level 3 in the fair value hierarchy since it was derived by unobservable inputs. The major unobservable input in connection with the valuation of the January 5 Warrants was the volatility used in the valuation model, which was approximated by using historical observations of the Company’s share price. The annualized historical volatility that has been applied in the January 5 Warrants valuation was 137.5%. A 5% increase in the volatility applied would have led to an additional 180-day extension,increase of 1.7% in the fair value of the January 5 Warrants.

2021 Second Registered Direct Equity Offering

On January 8, 2021, the Company entered into agreements with certain unaffiliated institutional investors pursuant to which it offered and sold 13,700,000 common shares and warrants to purchase up to 13,700,000 common shares (the “January 12 Warrants”) in a registered direct offering. In connection with this direct equity offering, which closed on January 12, 2021, the Company received gross and net cash proceeds of $26.0 million and $24.1 million, respectively.

The January 12 Warrants issued in the above offering had a term of five years and were exercisable immediately and throughout their term for $1.90 per common share (American style option). The exercise price of the January 12 Warrants was subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or until similar events affecting the Company’s common shares and also upon any distributions of assets, including cash, stock or other property to existing shareholders.

As of February 10, 2021, all the January 12 Warrants had been exercised, and, pursuant to their exercise and the issuance by the Company of 13,700,000 common shares, the Company received gross and net proceeds of $26.0 million.

On initial recognition the fair value of the January 12 Warrants was $37.3 million and was determined using the Black-Scholes methodology. The fair value was considered by the Company to be classified as Level 3 in the fair value hierarchy since it was derived by unobservable inputs. The major unobservable input in connection with the valuation of the January 12 Warrants was the volatility used in the valuation model, which was approximated by using historical observations of the Company’s share price. The annualized historical volatility that has been applied in the January 12 Warrants valuation was 152.1%. A 5% increase in the volatility applied would have led to an increase of 1.3% in the fair value of the January 12 Warrants.

2021 Third Registered Direct Equity Offering

On April 5, 2021, the Company entered into agreements with certain unaffiliated institutional investors pursuant to which it offered and sold 19,230,770 common shares and warrants to purchase up to 19,230,770 common shares (the “April 7 Warrants”) in a registered direct offering. In connection with this direct equity offering, which closed on April 7, 2021, the Company received gross and net cash proceeds of approximately $125.0 million and $116.3 million, respectively.

The April 7 Warrants issued in the above offering have a term of five years and are exercisable immediately and throughout their term for $6.50 per common share (American style option). The exercise price of the April 7 Warrants is subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Company’s common shares and also upon any distributions of assets, including cash, stock or other property to existing shareholders.
 
F-26
8.Equity Capital Structure (continued):

Between their issuance date and December 31, 2021, there were 0 exercises of the April 7 Warrants and, as a result, as of December 31, 2021, 19,230,770 April 7 Warrants remained unexercised and potentially issuable into common stock of the Company.

On initial recognition the fair value of the April 7 Warrants was $106.6 million and was determined using the Black-Scholes methodology. The fair value was considered by the Company to be classified as Level 3 in the fair value hierarchy since it was derived by unobservable inputs. The major unobservable input in connection with the valuation of the April 7 Warrants was the volatility used in the valuation model, which was approximated by using historical observations of the Company’s share price. The annualized historical volatility that has been applied in the April 7 Warrants valuation was 201.7%. A 5% increase in the volatility applied would have led to an increase of 0.7% in the fair value of the April 7 Warrants.

The Company accounted for the Class A Warrants, the Private Placement Warrants and the January 5, January 12 and April 7 Warrants as equity in accordance with the accounting guidance under ASC 815-40. The accounting guidance provides a scope exception from classifying and measuring as a financial liability a contract that would otherwise meet the definition of a derivative if the contract is both (i) indexed to the entity’s own stock and (ii) meets the equity classifications conditions. The Company concluded these warrants were equity-classified since they contained no provisions which would require the Company to account for the warrants as a derivative liability, and therefore were initially measured at fair value in permanent equity with subsequent changes in fair value not measured.

June 2021 at-the-market common stock offering program (the “Second ATM Program”)

On June 14, 2021, the Company, entered into a new at-the-market offering program with Maxim acting as a sales agent over a minimum period of 12 months under which the Company may, from time to time, offer and sell its common stock through an at-the-market offering having an aggregate offering price of up to $300.0 million. No warrants, derivatives, or other share classes were associated with this transaction. As of December 31, 2021, the Company had raised gross and net proceeds (after deducting sales commissions and other fees and expenses) under the Second ATM Program of $12.9 million and $12.4 million, respectively, by issuing and selling 4,654,240 common shares.

Reverse Stock Split

On May 28, 2021, the Company effected a one-for-ten reverse stock split of its common stock without any change in the number of authorized common shares. All share and per share amounts, as well as warrant shares eligible for purchase under the Company’s effective warrant schemes in the accompanying consolidated financial statements have been retroactively adjusted to regain compliance with Nasdaq’s minimum bid price requirement.reflect the reverse stock split. As a result of the reverse stock split, the number of outstanding shares as of May 28, 2021, was decreased to 89,955,848 while the par value of the Company’s common shares remained unchanged at $0.001 per share.
(b)Preferred Shares:
The table below presents
On September 22, 2017, Castor entered into a summaryshare exchange agreement (the “Exchange Agreement”) with the shareholders of Spetses to acquire all seriesof the outstanding common shares of Spetses in exchange for Castor issuing (i) 240,000 common shares proportionally to the then shareholders of Spetses, (ii) 12,000 Series B preferred shares to Thalassa, and (iii) 480,000  9.75% Series A cumulative redeemable perpetual preferred shares to the then shareholders of Spetses excluding Thalassa, all at par value of $0.001 (the “Series A Preferred Shares”). As the Exchange Agreement also involved the issuance of preferred shares, outstandingwhich were a new and additional class of shares, these have been recorded at fair value. The Company determined the fair value of the 9.75% Series A cumulative redeemable perpetual preferred shares to be $2.74 million as of December 31, 2019September 22, 2017, the date of their issuance, and 2020:
SeriesDescriptionInitial Issuance DateTotal Shares OutstandingLiquidation Preference per Share   (in dollars)Par ValueDividend RateCarrying Value December 31, 2019 and 2020
Series A
9.75% Cumulative
Perpetual Redeemable
09/22/17480,000
$30 (1)
$480Effective January 1, 2022- 9.75% per annum of a value of $25 per share$2,627,843
Series Bn/a09/22/1712,000-$12n/a$12
Total  492,000 $492 $2,627,855

(1)The Series A Preferred Shares from their original issue date and up to the Series A Amended SOD date had a liquidation preference of $25 per share. Following the Series A Amended SOD, the liquidation preference on the Series A Preferred Shares increased from $25 to $30 per share.

reflected the amount within Additional paid-in capital. The Series B preferred shares were deemed to have a fair value of 0 as they have no rights to dividends, do not have redemption/call rights and do not have any redemption features or a liquidation preference.

 
F-23F-27


CASTOR MARITIME INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars – except for share data unless otherwise stated)

7.8.Equity Capital Structure (continued):

Series A Preferred Shares amendment and accumulated dividends settlement:
On October 10, 2019, the Company reached an agreement with the holders of its Series A Preferred Shares to settle in full all accumulated dividend obligations on the Series A Preferred Shares (the “Series A DividendsPreferred Shares Settlement Agreement”) and to simultaneously adopt an Amended and Restated Statements of Designations of its Series A Preferred Shares (the “Series“Series A Amended SOD”Preferred Stock Amendment Agreement”). Pursuant to the Series A Dividends Settlement Agreement, the Series A Preferred holders agreed to forgive the Company’s obligations related to all due and overdue accumulated dividends on the Series A Preferred shares during the period from their original issue date up to and including June 30, 2019, amounting to $4.3 million, and to receive, in settlement thereof, 300,00030,000 newly issued common shares, the fair value of which as of the settlement date amounted to $967,800 and was determined through Level 1 input data of the fair value hierarchy, i.e. the common share closing market price at the date of issuance (the “Settlement Shares”). The dividends waived amounted to $3,379,589 and an amount of $1,819,575 was charged against retained earnings and an amount of $1,560,014 in the absence of retained earnings, charged against paid-in-capital. The Settlement Shares were issued to the Series A Preferred holders on October 17, 2019.
In addition, in accordance with the terms of the Series A Amended SOD, the Company and the Series A Preferred holders mutually agreed to:

i)waive all dividend payment obligations on the Series A Preferred Shares during the period from July 1, 2019 until December 31, 2021;

ii)reduce the previous progressively increasing dividend payment default rate that was 1.30 times the rate payable on the Series A Preferred Shares on the date preceding such payment to a fixed dividend payment default rate that is 1.30 times the base dividend payment rate;

iii)increase the redemption price of the Series A Preferred Shares to $30 from $25 per share in case that the Company exercises its current option to redeem the Series A Preferred Shares, in whole or in part, with cash; and

iv)increase the liquidation preference from $25 to $30 per Series A Preferred Share.
As a result of the foregoing, dividends on the Series A Preferred Shares neither accrue nor accumulate during the period from July 1, 2019 until December 31, 2021 and the Company does not have any dividend priority restrictions to holders of its common shares during this period.
The Company has accounted for the amendment to the rights, preferences and privileges of the Series A Preferred Shares, in accordance with FASB ASC Topic 260-10-S99-2, as an extinguishment of the original preferred stock and the issuance of new preferred stock due to the significance of the modifications to the substantive contractual terms of the preferred stock and the associated fundamental changes to the nature of the preferred stock, which, as discussed above, included the forfeiture of accrued dividends on the Series A Preferred Shares up to and including June 30, 2019 and the issuance of 300,00030,000 common shares in settlement thereof. Accordingly, upon extinguishment, the Company recorded a net gain of $112,637 on the Series A Preferred Stock within shareholders’ equity equal to the difference between the fair value of the new shares of preferred stock issued and the carrying amount of the old shares of preferred stock extinguished. The Company allocated the entire net gain on extinguishment of the Series A Preferred Shares to Additional paid-in capital. The net gain on extinguishment is reflected in the calculation of net income available to common stockholders in accordance with FASB ASC Topic 260, Earnings per Share. The non-recurring fair value measurement of the new Series A Preferred Shares was based on Level 3 hierarchical data using the income approach, which was based on projected cash flows discounted to their present value using a discount rate that considers the timing and risk of the forecasted cash flows. The discount rate used was 16.6% and was based on the average estimated value of a market participant’s cost of capital and debt, derived using customary market metrics and is considered an unobservable significant input.
F-24
On December 8, 2021, the Company redeemed all its 480,000 Series A Preferred Shares, each with a cash liquidation preference of $30, resulting in an aggregate redemption price of $14.4 million. The Company considered the guidance under FASB ASC Topic 260-10-S99-2 for the Series A Preferred Shares redemption and, as a result, the difference between the carrying value and the fair value of the Series A Preferred Shares, amounting to $11.8 million, was recognized in retained earnings as a deemed dividend, and has been considered in the 2021 earnings per share calculations (Note 11).

CASTOR MARITIME INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars – except for share data unless otherwise stated)

7.Equity Capital Structure (continued):
As of December 31, 20192020, and 2020,2021, there were no0 accumulated, due or overdue dividends on the Series A Preferred Shares.
Description
F-28
Dividends on Series A Preferred Shares will be cumulative from January 1, 2022 (or, for any newly issued and outstanding shares, from the dividend payment date immediately preceding the issuance date of such stock and, for shares issued on or before June 14, 2022, then January 1, 2022) and payable on each dividend payment date, which will be each June 15 and December 15, commencing on June 15, 2022, when, as and if declared by Company’s Board of Directors out of legally available funds for such purpose. Dividends on the Series A Preferred Shares will accrue at a rate of 9.75% per annum per Series A Preferred Share having a value of $25 per share. In the event that any semi-annual dividend payable on the Series A Preferred Shares is in arrears, the dividend rate payable on the Series A Preferred Shares shall be increased a single time to a rate of 1.30 times of the dividend rate for each Series A Preferred Share having a value of $25.00 per share until the dividend payment default is cured.
8.Equity Capital Structure (continued):
The Series A Preferred Shares rank, with respect to dividend distributions and distributions upon the liquidation, winding-up and dissolution of the Company’s affairs, senior to the common shares and the Series B Preferred Shares.
The Series A Preferred Shares do not have a mandatory redemption feature. The Company has the right to redeem the Series A Preferred Shares, in whole or from time to time in part, from any funds available for such purpose, on a date set by the Company. If the Company redeems Series A Preferred Shares with cash then each share of Series A Preferred Shares shall have a value of $30.00 per share, or the Cash Redemption Price. If paid in common shares or a Note, then each Series A Preferred Share shall have a value of $25.00 per share, or the Cashless Redemption Price.  If paid in common shares, the value of the common shares will be 90% of the lowest daily volume weighted average price on any trading day during the 5-consecutive trading day period ending and including the trading day immediately prior to the date of the applicable Redemption Date.

Description of Series B Preferred Shares:
The Series B Preferred Shares have the following characteristics: (i) the Series B Preferred Shares are not convertible into common shares, (ii) each Series B Preferred Share has the voting power of 100,000 common shares and shall count for 100,000 votes for purposes of determining quorum at a meeting of shareholders, (iii) the Series B Preferred Shares have no dividend or distribution rights and (iv)upon any liquidation, dissolution or winding up of the Company, the Series B Preferred Shares shall have the same liquidation rights as the common shares.

8.9.Financial Instruments and Fair Value Disclosures:
The principal financial assets of the Company consist of cash at banks, restricted cash, trade accounts receivable and amounts due from related party. The principal financial liabilities of the Company consist of trade accounts payable, amounts due to related parties and long-term debt (including related party debt).debt.
The following methods and assumptions were used to estimate the fair value of each class of financial instruments:
◾
Cash and cash equivalents, restricted cash, trade accounts receivable trade, net, amounts due fromfrom/to related partyparty/(ies) and trade accounts payable: The The carrying values reported in the accompanying consolidated balance sheets for those financial instruments are reasonable estimates of their fair values due to their short-term maturity nature. Cash and cash equivalents and restricted cash, current are considered Level 1 items as they represent liquid assets with short term maturities. The carrying value approximates the fair market value for interest bearing cash classified as restricted cash, non-current and is considered Level 1 item of the fair value hierarchy. The carrying value of these instruments is separately reflected in the accompanying consolidated balance sheets.
F-25


CASTOR MARITIME INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars – except for share data unless otherwise stated)

8.Financial Instruments and Fair Value Disclosures (continued):
◾
Long-term debt:The $11.0 Million Alpha Bank Facility and the Chailease Financial Services Facility secured credit facilities discussed in Note 6,7, have a recorded value which is a reasonable estimate of their fair value due to their variable interest rate and are thus considered Level 2 items in accordance with the fair value hierarchy as LIBOR rates are observable at commonly quoted intervals for the full terms of the loans. The fair value of the fixed interest bearing $5.0 Million Term Loan Facility, discussed in Note 3, determined through Level 2 inputs of the fair value hierarchy (quoted prices for identical or similar assets and liabilities in markets that are not active), approximates its recorded value as of December 31, 2020.
Concentration of credit risk: Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash and cash equivalents and trade accounts receivable. The Company places its cash and cash equivalents, consisting mostly of deposits, with high credit qualified financial institutions. The Company performs periodic evaluations of the relative credit standing of the financial institutions in which it places its deposits. The Company limits its credit risk with accounts receivable by performing ongoing credit evaluations of its customers'customers’ financial condition.
9.10.Commitments and contingencies:
Various claims, lawsuits, and complaints, including those involving government regulations and product liability, arise in the ordinary course of the shipping business. In addition, losses may arise from disputes with charterers, agents, insurance and other claims with suppliers relating to the operations of the Company'sCompany’s vessels. Currently, management is not aware of any such claims or contingent liabilities, which should be disclosed, or for which a provision should be established in the accompanying consolidated financial statements.
The Company accrues for the cost of environmental liabilities when management becomes aware that a liability is probable and is able to reasonably estimate the probable exposure. Currently, management is not aware of any such claims or contingent liabilities, which should be disclosed, or for which a provision should be established in the accompanying consolidated financial statements. The Company is covered for liabilities associated with the vessels’ actions to the maximum limits as provided by Protection and Indemnity (P&I) Clubs, members of the International Group of P&I Clubs.
F-29
10.Commitments and contingencies (continued):

(a)Commitments under Contracts for BWMS Installation
On November 15, 2018, theThe Company has entered into a contract to purchase and install BWMS on five of its dry bulk carriers which was further amended on October 20, 2019 and five of its tanker vessels. As of December 8, 2020, to reflect31, 2021, the Company’s vessel acquisitions, as applicable in each period. The Company had completed and put into use the BWMS installation on one of these five dry bulk carriers, the Magic Sun, during and one of the vessel’s scheduled dry-docking which took place infive tanker vessels, the fourth quarter of 2020,Wonder Mimosa, whereas, the contracted BWMS system installations on the Magic P and the Magic Moon were granted extensions from the third quarter of 2020remaining eight above discussed vessels are expected to the third quarter ofbe concluded during 2022. It is estimated that the contractual obligations related to these purchases, as well as purchases on the Company’s remaining fleet vessels (where not already installed), excluding installation costs, will be on aggregate approximately €0.7€3.0 million (or $0.8$3.4 million on the basis of a Euro/US Dollar exchange rate of €1.0000/$1.22711.1324 as of December 31, 2020).2021), of which €2.4 million (or $2.7 million) are due in 2022 and €0.6 million (or $0.7 million) are due in 2023. These costs will be capitalized and depreciated over the remainder of the life of each vessel. As of December 31, 2020, part of the BWMS equipment for the Magic P had been delivered to the vessel and has, thus, been included in Vessels, net in the accompanying consolidated balance sheet.
(b)Commitments under long-term lease contracts

F-26

CASTOR MARITIME INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars – except for share data unless otherwise stated)


9.Commitments and contingencies (continued):
The following table sets forth the Company’s future minimum contracted lease payments (gross(gross of charterers’ commissions), based on vessels’ commitmentcommitments to non-cancelable fixed time charter contracts (including fixture recaps) as of December 31, 2020, was $6.8 million, all due within the next 12 months. This amount2021. The calculation does not include any assumed off-hire days.

Twelve-month period ending December 31, Amount 
2022 $25,772,380 
Total $25,772,380 

11.Earnings/ (Loss) Per Share:
The Company calculates earnings/(loss) per share by dividing net income/(loss) available to common shareholders in each period by the weighted-average number of common shares outstanding during that period, after adjusting for the effect of cumulative dividends on the Series A Preferred Shares, whether or not earned, and the deemed dividend which resulted from the redemption of the Series A Preferred Shares on December 8, 2021. As further disclosed under Note 8, dividends on the Series A Preferred Shares did not accrue nor accumulate during the period from July 1, 2019 through their redemption date.
Diluted earnings/(loss) per share, if applicable, reflects the potential dilution that could occur if potentially dilutive instruments were exercised, resulting in the issuance of additional shares that would then share in the Company’s net income. During the year ended December 31, 2021, the denominator of diluted earnings per common share calculation includes the incremental shares assumed issued under the treasury stock method weighted for the period the shares were outstanding with respect to warrants that were outstanding during the year ended December 31, 2021. Securities that could potentially dilute basic earnings per share for the year ended December 31, 2021, that were excluded from the computation of diluted earnings per share because to do so would have been antidilutive, were the unexercised, as of December 31, 2021, April 7 Warrants, calculated in accordance with the treasury stock method.


For the year ended December 31, 2020, the Company incurred losses and the effect of the warrants outstanding during that period and as of that date, would be antidilutive. Hence, for the year ended December 31, 2020 “Basic loss per share” equaled “Diluted loss per share”. The Company had 0 potentially dilutive instruments in the year ended December 31, 2019.
F-30
11.Earnings/ (Loss) Per Share (continued):

The components of the calculation of basic and diluted earnings/(loss) per common share in each of the periods comprising the accompanying consolidated statements of comprehensive income/(loss) are as follows:
  
Year ended
December 31,
  
Year ended
December 31,
  
Year ended
December 31,
 
  2019
  2020
  2021
 
Net income/(loss) and comprehensive income/(loss) $1,088,149  $(1,753,533) $52,270,487 
Less: Cumulative dividends on Series A Preferred Shares  (372,022)  0   0 
Plus: Gain on extinguishment of preferred shares pursuant to the Series A Preferred Stock Amendment Agreement, net of expenses  112,637   0   0 
Less: Deemed dividend on Series A Preferred Shares
  0   0   (11,772,157)
Net income/(loss) and comprehensive income/(loss) available to common shareholders  828,764   (1,753,533)  40,498,330 
             
Weighted average number of common shares outstanding, basic
  266,238   6,773,519   83,923,435 
Earnings/(Loss) per common share, basic
 
3.11  
(0.26) 
0.48 

            
Plus: Dilutive effect of warrants
  0   0   1,409,293 
Weighted average number of common shares outstanding, diluted  266,238   6,773,519   85,332,728 
Earnings/(Loss) per common share, diluted
  $3.11   $(0.26)  $0.47 


12.Vessel Revenues:


The following table includes the voyage revenues earned by the Company by type of contract (time charters, voyage charters and pool agreements) in each of the years ended December 31, 2019, 2020, and 2021, as presented in the accompanying consolidated statements of comprehensive income/(loss):


  
Year ended
December 31,
  
Year ended
December 31,
  
Year ended
December 31,
 
  2019  2020  2021 
Time charter revenues 
$
5,967,772
   
12,487,692
   
111,900,699
 
Voyage charter revenues  
0
   
0
   
15,002,012
 
Pool revenues  
0
   
0
   
5,146,999
 
Total Vessel revenues $5,967,772  $12,487,692  $132,049,710 
As of December 31, 2021, trade accounts receivable, net increased by $6,924,622 and deferred revenue increased by $3,819,708 compared to December 31, 2020. These changes were mainly attributable to the timing of collections, the timing of commencement of revenue recognition, the increase in charter rates and the increase in vessel revenues resultant to the growth of the Company’s fleet during the year ended December 31, 2021.


As of December 31, 2020, deferred assets and deferred liabilities related to revenue contracts were $0 and $108,125, respectively and were recognized in earnings as the performance obligations were satisfied in 2021. As of December 31, 2021, deferred assets and deferred liabilities related to revenue contracts amounted to $191,234 and $3,927,833, respectively, are presented under Deferred charges, net (Current) and Deferred revenue, net (Current) respectively, in the accompanying consolidated balance sheet and will be recognized in earnings as the performance obligations will be satisfied in 2022.

F-31
10.12.
Vessel Revenue (continued):



This change in deferred contract assets and liabilities between December 31, 2020 and December 31, 2021, was mainly attributable to the timing of collections, the increase in vessel revenues resultant to the growth of the Company’s fleet and the timing of commencement of revenue recognition. Demurrage income for year ended December 31, 2021, amounted to $2,545,283.

13.Vessel Operating and Voyage Expenses:
The amounts in the accompanying consolidated statements of comprehensive income/(loss) are analyzed as follows:
  
Year ended
December 31,
  
Year ended
December 31,
  
Year ended
December 31,
 
Vessel Operating Expenses 2019
  2020
  2021
 
Crew & crew related costs $1,396,477   3,753,578   21,532,311 
Repairs & maintenance, spares, stores, classification, chemicals & gases, paints, victualling  868,915   2,314,260   9,828,139 
Lubricants  153,969   429,967   2,375,901 
Insurances  189,781   507,885   3,126,169 
Tonnage taxes  50,553   131,674   592,701 
Other  143,296   310,075   1,748,250 
Total Vessel operating expenses $2,802,991  $7,447,439  $39,203,471 
  
Year ended
December 31,
  
Year ended
December 31,
  
Year ended
December 31,
 
Voyage expenses 2019
  2020
  2021
 
Brokerage commissions $46,708  
158,538  
1,733,639 
Brokerage commissions- related party
  40,471   29,769   1,671,145 
Port & other expenses  46,100   173,645   4,520,584 
Bunkers consumption
  87,760   321,252   7,742,450 
Loss/(Gain) on bunkers  40,140   (98,499)  (2,717,035)
Total Voyage expenses $261,179  $584,705  $12,950,783 
 
14.General and Administrative Expenses:
General and administrative expenses include costs in relation to the administration of the Company and its non-recurring public registration costs.
Company Administration Expenses are analyzed as follows:

 
Year ended
December 31,
  
Year ended
December 31,
  
Year ended
December 31,
 
  2019  2020  2021 
Audit fees $119,535  $129,420  $265,744 
Chief Executive and Chief Financial Officer and directors’ compensation  12,000   29,000   48,000 
Other professional fees  247,242   572,533   1,752,566 
Administration fees-related party (Note 3(c))
  0   400,000   1,200,000 
Total $378,777  $1,130,953  $3,266,310 
The Chief Executive Officer and Chief Financial Officer compensation was terminated on October 1, 2020 and, subsequent to this date, all services rendered by the Company’s Chief Executive Officer and Chief Financial Officer are included in its Master Agreement with Castor Ships (see Note 3(c)).
F-32
14.General and Administrative Expenses (continued):

Public Registration Costs: During the years ended December 31, 2019, 2020 and 2021, the Company incurred public registration costs of $132,091, $0, and $0 respectively. Public registration costs relate to the costs incurred by the Company in connection with the Company’s registration and listing of its 240,000 issued and outstanding common shares on the Norwegian OTC on December 21, 2018, and the NASDAQ Stock Market on February 11, 2019. Apart from registration and listing costs, public registration costs further include legal, consultancy and other costs incurred in connection with the subject listings.
15.Interest and Finance Costs:
The amounts in the accompanying consolidated balance sheets are analyzed as follows:
  
Year ended
December 31,
  
Year ended
December 31,
  
Year ended
December 31,
 

 2019
  2020
  2021
 
Interest on long-term debt $47,585  $668,152  $2,028,676 
Interest on long-term debt – related party (Note 3 (b))  162,500   305,000   204,167 
Interest on convertible debt – non cash  0   57,773   0 
Amortization and write-off of deferred finance charges  6,628   599,087   414,629 
Amortization and write-off of convertible notes beneficial conversion features  0   532,437   0 
Other finance charges  5,450   27,128   207,526 
Total $222,163  $2,189,577  $2,854,998 
 
16.Income Taxes:
Castor and its subsidiaries are incorporated under the laws of the Republic of the Marshall Islands and they are not subject to income taxes in the Republic of the Marshall Islands. Castor’s ship-owning subsidiaries are subject to registration and tonnage taxes, which have been included in Vessel operating expenses in the accompanying consolidated statements of comprehensive income/(loss).
 
Pursuant to §883 of the Internal Revenue Code of the United States (the "Code"“Code”), U.S. source income from the international operation of ships is generally exempt from U.S. Federal income tax on such income if the company meets the following requirements: (a) the company is organized in a foreign country that grants an equivalent exception to corporations organized in the U. S. and (b) either (i) more than 50 percent of the value of the company'scompany’s stock is owned, directly or indirectly, by individuals who are "residents"“residents” of the company'scompany’s country of organization or of another foreign country that grants an "equivalent exemption"“equivalent exemption” to corporations organized in the U.S. (the "50%“50% Ownership Test"Test”) or (ii) the company'scompany’s stock is "primarily“primarily and regularly traded on an established securities market"market” in its country of organization, in another country that grants an "equivalent exemption"“equivalent exemption” to U.S. corporations, or in the U.S. (the "Publicly-Traded Test"“Publicly-Traded Test”). Marshall Islands, the jurisdiction where the Company and its ship-owning subsidiaries are incorporated, grants an equivalent exemption to United States corporations. Therefore, the Company is exempt from United States federal income taxation with respect to U.S.-source shipping income if either the 50% Ownership Test or the Publicly-TradedPublicly Traded Test is met.
For
In the Company’s case, it expects that it would have satisfied the Publicly-Traded Test if its common shares represented more than 50% of the voting power of its stock, and it can establish that nonqualified shareholders cannot exercise voting control over the corporation because a qualified shareholder controls the non-traded voting stock. The Company therefore believes its stock structure, when considered by the U.S. Treasury in light of the Publicly-Traded Test enunciated in the regulations satisfies the intent and purpose of the exemption. This position is uncertain and will be disclosed to the Internal Revenue Service when the Company files its U.S. tax returns for 2021.
F-33
16.     Income Taxes (continued):

Because the position stated above is uncertain, the Company has recorded a provision of $497,339 for U.S. source gross transportation income tax in the accompanying consolidated statement of comprehensive income/(loss) for the year ended December 31, 2020, the Company determined that it did not satisfy the Publicly-Traded Test as a result of its shares not meeting the "regularly traded" requirement as set forth under the regulations.2021. In addition, the Company did not satisfy the 50% Ownership Test as it is unable to substantiate certain requirements regarding the identity of its shareholders. As a result, the Company did not qualify for exemption under §883 of the Code from the 4% U.S. Federal income tax on its U.S. source gross transportation income. U.S. source gross transportation income is defined as 50% of shipping income that is attributable to transportation that begins or ends, but does not both begin and end, in the U.S. Gross transportation income from each voyage is equal to the product of (i) the number of days in each voyage and (ii) the daily charter rate paid to the Company by the charterer.
As a result, U.S. source income taxes of approximately $21,640 were recognized in the accompanyingits consolidated comprehensive income/(loss) for the year ended December 31, 2020.

11.Earnings/ (Loss) Per Share:
17.Segment Information:
The
During 2021, the Company calculates earnings/(loss) per share by dividing net income/(loss) available to common stockholders in each period by the weighted-averageacquired a number of common shares outstanding during that period, after adjustingtanker vessels for the effectfirst time. As a result of cumulative dividends on the Series A Preferred Shares, whether or not earned,different characteristics of the Aframax/LR2 tanker vessels and only at periods when dividends on the Series A Preferred Shares are contractually allowed to accumulate.   
Diluted earnings/(loss) per share, if applicable, reflectsHandysize tanker vessels acquired, the potential dilutionCompany determined that, could occur if potentially dilutive instruments were exercised, resulting in the issuance of additional shares that would then share in the Company’s net income. As of December 31, 2020, securities that could potentially dilute basic loss per share that were excludedwith effect from the computationfourth quarter of diluted loss per share, because to do so would have been antidilutive for2021, the period presented, wereCompany operated in 3 reportable segments: (i) dry bulk, (ii) Aframax/LR2 tanker and (ii) Handysize tanker. The reportable segments reflect the incremental shares in connection with the unexercised, as of December 31, 2020, 56,090,500 Class A warrants and the 57,750,000 Private Placement Warrants (Note 7), calculated in accordance with the treasury stock method. The Company had no dilutive instruments in the year ended September 30, 2018, the Transition Period ended December 31, 2018 and the year ended December 31, 2019.
The components of the calculation of basic and diluted net loss per common share in each of the periods comprising the accompanying consolidated statements of comprehensive income/(loss) are as follows:
F-27

CASTOR MARITIME INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars – except for share data unless otherwise stated)

11.Earnings/ (Loss) Per Share (continued):

  Year ended September 30,  
Three months ended
December 31,
  
Year ended
December 31,
  
Year ended
December 31,
 
  2018  2018  2019  2020 
Net income/(loss) and comprehensive income/(loss) $980,938  $276,442  $1,088,149  $(1,753,533)
Less: Cumulative dividends on Series A Preferred Shares
  (1,646,775)  (992,745)  (372,022)  — 
Plus: Gain on extinguishment of preferred stock pursuant to the Series A Preferred Stock Amendment Agreement, net of expenses  —   —   112,637   — 
Net income/ (loss) and comprehensive income/ (loss) available to common shareholders  (665,837)  (716,303)  828,764   (1,753,533)
Weighted average number of common shares outstanding, basic and diluted  2,400,000   2,400,000   2,662,383   67,735,195 
(Loss)/Earnings per common share, basic and diluted $(0.28) $(0.30) $0.31  $(0.03)

12.Vessel Operating and Voyage Expenses:

The amounts in the accompanying consolidated statements of comprehensive income/(loss) are analyzed as follows:
  
Year ended
September 30,
  Three months ended December 31,  
Year ended
December 31,
  
Year ended
December 31,
 
 Vessel Operating Expenses 2018  2018  2019  2020 
Crew & crew related costs  983,985   239,610   1,396,477   3,753,578 
Repairs & maintenance, spares, stores, classification, chemicals & gases, paints, victualling  415,306   124,354   868,915   2,314,260 
Lubricants  95,835   19,750   153,969   429,967 
Insurances  133,090   31,869   189,781   507,885 
Tonnage taxes  40,345   8,583   50,553   131,674 
Other  59,209   8,378   143,296   310,075 
Total Vessel operating expenses $1,727,770  $432,544  $2,802,991  $7,447,439 


  
Year ended
September 30,
  Three months ended December 31,  
Year ended
December 31,
  
Year ended
December 31,
 
Voyage expenses 2018  2018  2019  2020 
Brokerage commissions  90,194   14,375   87,179   188,307 
Port & other expenses  57,042   5,181   46,100   173,645 
(Gain)/loss on bunkers  (109,863)  —   127,900   222,753 
Total voyage expenses $37,373  $19,556  $261,179  $584,705 

F-28


CASTOR MARITIME INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars – except for share data unless otherwise stated)

13.General and Administrative Expenses:
General and administrative expenses include costs in relation to the administrationinternal organization of the Company and its non-recurring public registration costs.
the way the chief operating decision maker reviews the operating results and allocates capital within the Company. In addition, the transport of dry cargo commodities, which are carried by dry bulk vessels, has different characteristics to the transport of crude oil (carried by Aframax/LR2 tankers) and differs again from the transport of oil products (carried by Handysize tanker vessels). Further, dry bulk vessels trade on different types of charter contracts as compared to tanker vessels, predominantly being employed in the time charter market, whereas the Company’s tanker vessels participate in the voyage charter market and in pooling agreements. The transportation of crude oil also has different characteristics to the transportation of oil products in terms of trading routes and cargo handling.
Company Administration Expenses: Company administration expenses are analyzed as follows:

  
Year ended
September 30,
  Three months ended December 31,  
Year ended
December 31,
  
Year ended
December 31,
 
  2018  2018  2019  2020 
Audit fees $91,700  $20,000  $119,535  $129,420 
Chief Executive and Chief Financial Officer and directors’ compensation  12,000   3,000   12,000   29,000 
Other professional fees  5,533   (46)  247,242   572,533 
Administration fees-related party  -   -   -   400,000 
Total $109,233  $22,954  $378,777  $1,130,953 


The Chief Executive Officer and Chief Financial Officer compensation was terminated on October 1, 2020 and, subsequent to this date, all services rendered bytable below presents information about the Company’s Chief Executive Officerreportable segments as of and Chief Financial Officer are included in its Master Agreement with Castor Ships (see Note 3(d) above).
Public Registration Costs: During the year ended September 30, 2018, the Transition Period ended December 31, 2018 andfor the years ended December 31, 2019, and 2020, when the Company incurred public registration costs of $350,167, $161,116, $132,091had 1 reportable segment, and $0 respectively. Public registration costs relate tofor the costs incurred byyear ended December 31, 2021, when the Company had more than one reportable segment. The accounting policies followed in connection withthe preparation of the reportable segments are the same as those followed in the preparation of the Company’s registration and listing of its 2,400,000 issued and outstanding common sharesconsolidated financial statements. Segment results are evaluated based on the Norwegian OTC on December 21, 2018 and the NASDAQ Stock Market on February 11, 2019. Apartincome/ (loss) from registration and listing costs, public registration costs further include legal, consultancy and other costs incurred in connection with the subject listings.operations.

  
Year ended
December 31,
  
Year ended
December 31,
  Year ended December 31, 
  2019  2020  2021 
  
Dry bulk
segment
  
Dry bulk
segment
  
Dry bulk
segment
  
Aframax/LR2
tanker
segment
  
Handysize
tanker
segment
  Total 
  - Time charter revenues $5,967,772  $12,487,692  $102,785,442  $9,115,257  $0  $111,900,699 
  - Voyage charter revenues  0   0   0   15,002,012   0   15,002,012 
  - Pool revenues  0   0   0   2,442,144   2,704,855   5,146,999 
Vessel revenues, net $5,967,772  $12,487,692  $102,785,442  $26,559,413  $2,704,855  $132,049,710 
Voyage expenses (including charges from related parties)  (261,179)  (584,705)  (1,891,265)  (11,003,925)  (55,593)  (12,950,783)
Vessel operating expenses  (2,802,991)  (7,447,439)  (26,841,600)  (9,776,724)  (2,585,147)  (39,203,471)
Management fees to related parties  (212,300)  (930,500)  (4,890,900)  (1,433,950)  (419,900)  (6,744,750)
Depreciation and amortization  (897,171)  (1,904,963)  (10,528,711)  (3,087,764)  (746,353)  (14,362,828)
Provision for doubtful accounts  0   (37,103)  (2,483)  0   0   (2,483)
Segments operating income/(loss) (1)
 $1,794,131  $1,582,982  $58,630,483  $1,257,050  $(1,102,138) $58,785,395 
Less: Unallocated corporate general and administrative expenses  (510,868)  (1,130,953)  0   0   0   (3,266,310)
Total consolidated operating income/(loss) $1,283,263  $452,029  $58,630,483  $1,257,050  $(1,102,138) $55,519,085 

14.
(1)
InterestDoes not include unallocated corporate general and Finance Costs:administrative expenses amounting to $510,868, $1,130,953 and $3,266,310 in each of the years ended December 31, 2019, 2020 and 2021, respectively.
The amounts
F-34
17.    Segment Information (continued):

A reconciliation of total segment assets to total assets presented in the accompanying consolidated balance sheets are analyzedof December 31, 2020, and 2021, is as follows:
  
Year ended
September 30,
  Three months ended December 31,  
Year ended
December 31,
  
Year ended
December 31,
 
  2018  2018  2019  2020 
Interest on long-term debt $-  $-  $47,585  $668,152 
Interest on long-term debt – related party (Note 3 (c))  -   -   162,500   305,000 
Interest on convertible debt – non cash (Note 6)  -   -   -   57,773 
Amortization and write-off of deferred finance charges  -   -   6,628   599,087 
Amortization and write-off of convertible notes beneficial conversion features  -   -   -   532,437 
Other finance charges  3,393   519   5,450   27,128 
Total $3,393  $519  $222,163  $2,189,577 


  
Year Ended
December 31,
2020
  
Year Ended
December 31,
2021
 
Dry bulk segment $67,387,635  $314,407,704 
Aframax tanker segment  0   104,953,507 
Handysize tanker segment  0   19,093,379 
Cash and cash equivalents (1)
  6,882,398   23,950,795 
Prepaid expenses and other assets (1)
  101,322   508,057 
Total consolidated assets $74,371,355  $462,913,442 

F-29


CASTOR MARITIME INC.(1)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ExpressedRefers to assets of other entities (Castor Maritime Inc. and Castor Maritime SCR Corp.) included in U.S. Dollars – except for share data unless otherwise stated)the consolidated financial statements.


15.18.Subsequent Events:

(a)  Equity Offerings:
Second Registered Direct Equity Offering: On December 30, 2020, the Company entered into agreements with certain unaffiliated institutional investors pursuant to which it offered and sold 94,750,000 common shares and warrants to purchase 94,750,000 common shares (the “January 5 Warrants”) in a registered direct offering. In connection with this offering, which closed on January 5, 2021, the Company received gross proceeds of approximately $18.0 million.
(a)
Delivery of the Magic Callisto: On January 4, 2022, the Company’s wholly owned subsidiary, Mickey, pursuant to a purchase agreement entered into on December 17, 2021, took delivery of the Magic Callisto, a Japanese-built Panamax dry bulk carrier acquired from a third-party in which a family member of Petros Panagiotidis had a minority interest. The vessel was purchased for $23.55 million. The terms of the transaction were negotiated and approved by a special committee of disinterested and independent directors of the Company.
Third Registered Direct Equity Offering: On January 8, 2021, the Company entered into agreements with certain unaffiliated institutional investors pursuant to which it offered and sold 137,000,000 common shares and warrants to purchase 137,000,000 common shares (the “January 12 Warrants”) in a registered direct offering. In connection with this offering, which closed on January 12, 2021, the Company received gross proceeds of approximately $26.0 million.
(b)  Vessel Acquisitions:
On January 20, 2021, the Company entered into an agreement with an unaffiliated third party for the purchase of the Magic Orion, a secondhand 2006 Japanese-built Capesize dry bulk carrier for a purchase price of $17.5 million. The Magic Orion was delivered to the Company on March 17, 2021 and was financed in its entirety with cash on hand.
On January 28, 2021, the Company entered into an agreement with an unaffiliated third party for the purchase of the Magic Venus, a secondhand 2010 Japanese-built Kamsarmax dry bulk carrier for a purchase price of $15.85 million. The Magic Venus was delivered to the Company on March 2, 2021 and was financed in its entirety with cash on hand.
(b)
Entry into $55.0 million financing: On January 12, 2022, the Company entered into a $55.0 million senior secured term loan facility with Deutsche Bank AG, through and secured by 5 of the Company’s dry bulk ship-owning subsidiaries, those owning the Magic Starlight, Magic Mars, Magic Pluto, Magic Perseus and the Magic Vela, and guaranteed by the Company. This facility has a tenor of five years, bears interest at a margin over adjusted SOFR per annum andcontains a standard security package including a first preferred cross-collateralized mortgage on the vessels owned by the borrowers, pledge of bank accounts, charter assignments, shares pledge, a general assignment over the vessel’s earnings, insurances, and any requisition compensation in relation to the vessel owned by the borrower, and managers’ undertakings and is guaranteed by the Company.Pursuant to the terms of this facility, the borrowers are subject to (i) a specified minimum security cover requirement, which is the maximum ratio of the aggregate principal amounts due under the facility to the aggregate market value of the mortgaged vessels plus the value of the dry-dock reserve accounts referred to below and any additional security, and (ii) to certain minimum liquidity restrictions requiring us to maintain certain blocked and free liquidity cash balances with the lender, to maintain and gradually fund certain dry-dock reserve accounts in order to ensure the payment of any costs incurred in relation to the next dry-docking of each mortgaged vessel, as well as to certain customary, for this type of facilities, negative covenants. Moreover, the facility contains certain financial covenants requiring the Company as guarantor to maintain (i) a ratio of net debt to assets adjusted for the market value of the Company’s fleet of vessels, to net interest expense ratio above a certain level, (ii) an amount of unencumbered cash above a certain level and, (iii) the Company’s trailing 12 months EBITDA to net interest expense ratio not to fall below a certain level. The loan was drawn down in full in 5 tranches on January 13, 2022.
On February 2, 2021, the Company entered into an agreement with an unaffiliated third party for the purchase of the Magic Argo, a secondhand 2009 Japanese-built Kamsarmax dry bulk carrier for a purchase price of $14.5 million. The Magic Argo was delivered to the Company on March 18, 2021 and was financed in its entirety with cash on hand.
On February 5, 2021, the Company entered into agreements to purchase two 2005 Korean-built Aframax LR2 tankers from an unaffiliated third-party seller for an aggregate purchase price of $27.2 million. Both vessels have attached time charter contracts with a reputable charterer with an estimated remaining term of about one year, each of which shall provide the Company with a minimum gross daily hire of $15,000 and have a 50% profit sharing arrangement over such level based on a predetermined formula. The charterer has the option to extend the duration of each contract for an additional one-year term. The M/T Wonder Polaris and the M/T Wonder Sirius were delivered to the Company on March 11, 2021 and March 22, 2021, respectively. Both acquisitions were financed in their entirety with cash on hand.
On February 18, 2021, the Company entered into an agreement with an unaffiliated third party for the purchase of a secondhand 2010 Korean-built Kamsarmax dry bulk carrier for a purchase price of $14.8 million. The acquisition is expected to be consummated by taking delivery of the vessel sometime in the beginning of the second quarter of 2021 and is expected to be financed in its entirety with cash on hand.
On March 9, 2021, the Company entered into an agreement with an unaffiliated third party for the purchase of a secondhand 2010 Korean-built Kamsarmax dry bulk carrier for a purchase price of $15.5 million. The acquisition is expected to be consummated by taking delivery of the vessel within the second quarter of 2021 and is expected to be financed in its entirety with cash on hand.
On March 11, 2021, the Company entered into an agreement with an unaffiliated third party for the purchase of a secondhand 2011 Japanese-built Kamsarmax dry bulk carrier for a purchase price of $16.9 million. The acquisition is expected to be consummated by taking delivery of the vessel sometime between the second and third quarter of 2021 and is expected to be financed in its entirety with cash on hand.
F-30F-35


CASTOR MARITIME INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars – except for share data unless otherwise stated)

15.Subsequent Events (continued):

(c)  Entry into $15.3 Million Debt Financing: On January 22, 2021, the Company, through two of its ship-owning subsidiaries, entered into a $15.3 million senior secured post-delivery term loan facility with Hamburg Commercial AG (the “$15.3 Million Hamburg Facility”). The $15.3 Million Hamburg Facility was drawn in full on January 27, 2021. The facility has a tenor of four years from the drawdown date, bears interest at 3.30% plus LIBOR per annum, and is secured by first mortgages on the Magic Horizon and the Magic Nova.
 (d)  $5.0 Million Term Loan Facility Extension: On March 2, 2021, the Company entered into a supplemental agreement pursuant to which it extended its originally maturing on March 3, 2021, $5.0 Million Term Loan Facility for an additional six-month period on terms similar with those of the initial loan agreement.
(e)  Subsequent Warrant Exercises: Subsequent to December 31, 2020 and up to March 25, 2021, there have been exercises of 55,374,200 Class A Warrants, 57,071,360 Private Placement Warrants, 94,750,000 January 5 Warrants and 137,000,000 January 12 Warrants which resulted in the issuance of an equivalent number of the Company’s common shares and proceeds to the Company of approximately $83.4 million.


F-31